Looking for the best deal on motor trade liability insurance means getting the best price and also the cover you need making sure that you are properly protected against financial loss and legal actions.
What is motor trade liability insurance?
As the name suggests, Motor Trade Liability insurance is liability insurance specifically designed to meet the needs of businesses in the motor trade. The cover can be arranged by way of a standalone policy, or as part of another policy, e.g. Motor Trade Combined or Motor Trade Road Risks.
The market for Motor Trade Liability insurance is restricted to the insurers providing Motor Trade Combined insurance, for which liability is a constituent part, or a small number of specialist insurers willing to provide the cover in isolation or as an extension to a Motor Trade Road Risks insurance.
The same basic cover tends to be given to all sectors of the motor trade, whether sales, repair or service, with specific endorsements being applied to tailor cover in accordance with the insurer’s requirements. Special attention needs to given to additional endorsements applied to ensure the cover remains suitable.
Essentially, the cover is in the same format as a general liability insurance product, covering Employers’ Liability, Public Liability and Products Liability, with Products Liability also being known as Defective Workmanship or Sales and Service Indemnity.
Employers liability insurance for the motor trade
The Employers’ Liability cover is standard, providing cover for the employers’ legal liability for death, injury or disease to employees arising in the course of the business. A standard limit of indemnity of £10M each and every claim, costs inclusive is given, and the cover is usually fee from any excess. Higher limits of indemnity are available, but this may require additional excess of loss insurance(s) to achieve the required limit.
It is the Public and Products (Defective Workmanship/Sales and Service Indemnity) Liability cover that is the real differentiator between the different insurances available and the extent of cover offered needs to be understood prior to accepting cover to avoid claims being refused unexpectedly. The basic Public Liability provides cover for legal liability for injury to third parties and damage to third party property arising in the course of the business, excluding liability arising from goods sold or services provided. The standard limits are £1M, £2M and £5M each and every claim, and cover is usually subject to a modest third party property damage excess. Different and higher limits of indemnity are available, but this may require additional excess of loss insurance(s) to achieve the required limit. Products (Defective Workmanship/Sales and Service Indemnity) Liability is available only with Public Liability and provides cover for legal liability for injury to third parties and damage to third party property arising from the products sold (including vehicles) or work undertaken/services provided in the course of the business. The standard limits are £1M, £2M and £5M each and every claim and in the annual aggregate following the Public Liability limit selected, and cover is usually subject to a third party property damage excess that may be higher than the Public Liability excess. Different and higher limits of indemnity are available, but this may require additional excess of loss insurance(s) to achieve the required limit.
What is defective workmanship and sales and service indemnity insurance?
The Products (Defective Workmanship/Sales and Service Indemnity) Liability is the key cover that needs to be understood for businesses wanting the most from their protection against claims by third parties. Of particular note is some policies contain an exclusion for liability arising from the failure of the product or service to fulfil its intended function (known as the Efficacy Exclusion). This exclusion severely restricts cover in certain circumstances, and preference should be given to covers offered without this exclusion where it considered to be a significant restriction.
Am I covered for damage to customers vehicles?
An area of confusion is the cover, if any, for loss or damage third party vehicles in the possession of the motor trader. This would normally be covered by Road Risks insurance whilst the vehicle is being driven on the road, or by the Customers Vehicles Property Damage section of a Motor Trade Combined insurance whilst the vehicle is at the premises of the motor trader. Motor Trade Liability insurance will usually exclude legal liability for loss or damage to property in the care, custody or control of the Insured, but businesses that are mobile or do not have Motor Trade Combined insurance can extend their Motor Trade Liability insurance to include legal liability for loss or damage to third party property (including vehicles) in their care, custody or control. There may an additional premium charged, with cover being subject to a lower inner limit and a higher excess.
Public Liability is available without the Products (Defective Workmanship/Sales and Service Indemnity) Liability cover, and can be offered in this way without it being specifically pointed out. If in doubt, always check the extent of cover provided with your supplier.
How much does motor trade liability insurance cost?
The cost of public liability insurance for motor traders has reduced quite dramatically in recent years and the price you pay will be based upon how many people are involved in the business, the limit of indemnity you require, whether you require sales and service indemnity or defective workmanship and whether you have had any claims made against you previously.
How do I buy motor trade liability insurance?
You can apply on-line or call us direct to discuss your requirements with a broker who will be happy to provide you with a range of cover and options to meet your needs.