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    Commercial Vehicle vs Motor Trade Insurance: What is Right for You?

    Commercial Vehicle vs Motor Trade Insurance

    If you’re starting your motor trade business, insurance is an important factor to get right. Your personal car insurance will only usually cover business driving in terms of commuting to and from a single place of work. If you need to drive to multiple locations, either to visit clients or deliver goods, you may need commercial vehicle insurance. If your work involves other people’s vehicles, you may need motor trade insurance.

    Depending on the nature of your business, you may need commercial vehicle insurance or motor trade insurance, but what’s the difference?

    Commercial Car Insurance, Business Car Insurance & Motor Trade Insurance: Key Differences

    The main difference in these three types of insurance relate to the way your work relates to vehicles.

    Commercial Vehicle Insurance: For people who’s vehicle is integral to work, such as a driving instructor or taxi driver.
    Business Vehicle Insurance: For people who drive a lot to access work, such as multiple work locations, visiting clients or long-distance driving for work, but do not need the vehicle to carry out the job.

    Motor Trade Insurance: For people who work with other people’s vehicles, such as mechanics, valeting services, car dealers, etc.

    What Is Commercial Vehicle Insurance?

    Commercial Car Insurance, Business Car Insurance & Motor Trade Insurance

    If your vehicle is a key part of your business, for example as a driving instructor, courier or taxi driver, you will need commercial vehicle insurance.

    As with private car insurance, you can choose from three cover levels: third party only, third party, fire and theft or comprehensive.

    Commercial vehicle insurance may also include specially designed policies that are more specific, such as:

    • Fleet Insurance
    • Commercial minibus insurance
    • Taxi Insurance
    • Truck insurance
    • Haulage insurance


    Other options are typically available, such as named driver policies and any driver policies appropriate for businesses with numerous vehicles and many drivers, like taxi services, hauliers, or delivery services. You may need a specific type of insurance depending on the type of vehicle you drive:

    Commercial Car Insurance

    People who depend on their cars for their jobs, like delivery drivers, cab drivers, or driving instructors, are covered by commercial car insurance.

    Commercial Van Insurance

    If you use a van for your business, commercial van insurance is a more specific and appropriate type of cover for you. Van insurance can vary depending on whether you use your van for deliveries or to carry your own tools, as there are different classes of van insurance to specify. For commercial van insurance, you will likely fall into the category of Carriage of Own Goods (you use the van to carry tools and equipment needed to carry out your work) or Haulage (you use the van to deliver goods in exchange for money AND to deliver goods that don’t belong to you).

    Business Car Insurance

    If your car is not integral to your job, but you still use it to travel to multiple work locations, you’re more likely to need Business Car Insurance. There are several different classes of Business Car Insurance, depending on what the level of coverage you need:

    Class 1: insures your car if you use it to visit clients or customers or to drive between multiple work locations.

    Class 2: is the same as Class 1, but also allows you to add a named driver, for example, a co-worker who will be insured to drive the same car.

    Class 3: covers long-distance driving for work.

    What is Motor Trade Insurance?

    What is Motor Trade Insurance

    In order to ensure that any repairs or replacements can be paid for in unfortunate circumstances, motor trade insurance offers coverage for people working in the motor trade industry. You might be looking for insurance for mechanics or car salespeople, both of which fall under the category of motor trade insurance.

    In addition to protecting your business’s stock, tools, and vehicles against fire and theft, you can purchase motor trade insurance to cover third-party losses while you’re at work.

    You are likely to need Motor Trade Insurance if you work in a motor trade business such as:

    • Service and repair garages
    • Mobile mechanics
    • Breakdown and recovery operators
    • MOT stations
    • Car dealers
    • Vehicle collection and Delivery agents
    • Body shops
    • Valeters
    • Tyre fitters

    Any other business which buys, sells, services, repairs, moves or cleans vehicles

    Motor Trade Insurance mainly offers Road Risk Insurance

    A motor trade road risk policy is different from a private motor policy in that it only specifies the driver and does not mention any specific vehicles. This entails that you are protected to operate any vehicles you own in the course of your employment and to operate customer vehicles, such as to inspect repairs or transport them from one location to another.
    Our road risk insurance policies are designed for smaller companies and independent mechanics. If you need to drive a car that you don’t own, you must have road risk insurance.

    We can offer the appropriate level of road risk insurance coverage to ensure your complete protection, whether you deal in the buying and selling of automobiles, are a mechanic, or own a car valeting business.

    There are three levels of coverage for road risks:

    The least amount of insurance you can purchase is third-party only. This includes harm to a third party’s person, vehicle, or property while you are operating a vehicle in the course of your employment in the motor trade. The car you were driving at the time is not covered by this kind of insurance.
    As well as the above, third-party, fire, and theft insurance provides coverage for fire damage and a stolen car or car parts in your possession.
    The highest level of coverage is comprehensive, which includes insurance for damage to the car you are driving as well as third-party, fire, and theft coverage.

    Road Risks Cover frequently covers the vehicle’s trade value. Think about the number of vehicles your business will need to insure.

    What else can a motor trade policy cover my business for?

    As insurance is often available at a discount when multiple policies are taken out together, motor trade insurance can be combined with other business insurance policies.
    Motor Trade Combined Insurance, or Traders’ Combined Insurance, is designed for larger motor trade businesses to cover their many assets and investments.

    A Motor Trade Combined Insurance policy may include:

    • Business Premises Cover
    • Vehicle Stock Cover
    • Tools & Equipment Cover
    • Demonstration Cover
    • Product Liability
    • Money Cover
    • Engineering Inspection Cover
    • Management liability Insurance
    • MOT loss of licence cover
    • Business Interruption cover

    Ensure you have the Right Vehicle Insurance for Work

    There are many factors to consider when choosing the right type of vehicle insurance, but if you drive a lot in relation to work, a personal insurance policy will likely not be enough. We hope this has been a helpful guide to help you understand the difference between commercial vehicle insurance and motor trade insurance. You can read more about motor trade insurance on our website. If you wish to speak to an insurance advisor and discuss any of the types of coverage we discuss in this guide, feel free to get in touch.

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