Frequently Asked Questions on Motor Trade Insurance ( FAQ's )

Below we have compiled a list of questions that are asked frequently on the subject of motor trade insurance and sole trader insurance. The question list is updated on a regular basis so that the content remains relevant.

What is motor traders Insurance?

This is normally referred to as motor trade insurance, but it covers van and bike traders. If your business is related to the motor transport industry for example a mobile mechanic then we can offer provide you with comparative quotes. 

How does traders insurance work?

A motor trade insurance policy is taken out by a business that deals in the trading of vans,bikes and cars ( motorised vehicles). This type of cover is needed by dealer or people involved in the buying and selling vehicles,. However, it also applicable for other motor related businesses. These include running a commercial garage, repairs and service, valeting and so forth. So if you are handling other people's cars as part of your business likely you will need motor traders insurance. The policy is applicable for full or part time motor traders and business small and large. Th policy premium will reflect the size of the business, the larger the more expensive.

What is professional indemnity insurance in the UK?

If as a sole trader you provide advice or provide a professional service for example, as an architect, indemnity cover will cover your legal costs and pay out compensation to the client to fix the resulting damage.

What happens if I don't have professional indemnity insurance?

The regulatory requirements of your industry will dictate if you require PI. Typical industries that it is mandatory include, but is not limited to engineering, surveying and accountancy. In addition, professions that work on a consulting or contractual basis, such as an IT contractor or business consultants will normally only be offered work if they have professional indemnity cover in place.

How do I apply for trade plates?

Trade plates are reserved for workers within the motor trade industry. The let you drive vehicles that are in your possession for the purpose of trading or transporting. Without these you would not have insurance to drive a vehicle that you just bought without first contacting your insurance company. You can clearly see how trade plates are a must for any one working with motorcars.

To apply for trade plates complete form VTL301.

How much do trade plates cost?

You can apply for trade licence plates for a period of 6 or 12 months. The 6 month plates are the cheapest, expect to pay a little under £100. 12 months are more cost effective , budget around £160 - £180

How long will I wait for my trade plates?

According to the DVLA if your application is successful, expect to wait 4 weeks before receiving your trade plates.

Do you provide under 25 trader insurance?

We can offer comparative quotes for under 25 traders insurance. This will be more expensive than over 25, but it does come with higher risks to the broker.

How long after payment until I receive my trade insurance documents

On completion, you will receive an email that will contain your policy details. This will send immediately after payment has nee processed. The actual hard copy will be sent via post within a few days. Some brokers will also provide a copy online for easy access.

Will it cost more to add extra drivers to my traders policy?

Yes. Adding additional drivers will increase the risk and thus increase your policy premium. The amount will depend upon the new driver risk profile.

Can i drive a car on traders insurance?

Trade policies will normally permit you to drive your own vehicles plus vehicles that you have currently in your possession for the purpose of trading. Please note some brokers may limit the vehicle categories or exclude some categories. If you are dealing in vans and cars please make sure this noted in the policy, with any restrictions on weight or size.

Are my business premises included in my Trader policy?

If you opt for a combined policy this will give you the option to include your business premises, stock, tools and cash. Again, check for restriction or limits on these.

How much Is Motor Trade Insurance?

Naturally the costs will depend on a number of factors. Below we have separated out the main factors that go towards deciding the costs of your trader policy.

  • Location : The location of your business if you are operating from premises will have factor in deciding the final costs. For example if your postcode is inner city and associated with a high crime rate, expect to pay more. 
  • Nature Of Business : Are you a part time trader or work full time as a a trader. Do your work from home, provide a mobile service. If you operate a commercial garage expect to need additional cover above standard road risk.
  • Indemnity and Excess : To reduce your insurance aim for a lower indemnity amount ( the amount the insurer is liable for ). Increasing the excess will also lead to a cheaper motor trade insurance quote.
  • PT : Is an insurance premium tax that is applied to the sale of all insurance policies within the UK. It currently sitting at 12%, but like VAT expect it to increase in the future

Traders Insurance