What is Road Risk Insurance?
Road risk insurance is the most common bought form of motor trade insurance. It insures motor traders for working on and driving vehicles belonging to their clients. It also enables a trader to insure cars they are buying and selling (subject to a MID update).
Insurance for road risks is typically bought by those who trade from home as it does not insure a property.
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What Are The Different Types Of Road Risk Insurance?
There are three main types of road risk insurance that are available to motor traders. These include:
- Third-Party Only (TPO) Road Risk Insurance: This is the most basic level of road risk insurance that is legally required. It covers damage or injury that you cause to third parties but does not cover any damage to your own vehicle.
- Third-Party, Fire and Theft (TPFT) Road Risk Insurance: This level covers damage or injury caused to third parties as well as covering your own vehicle in the event that it is stolen or damaged by fire.
- Comprehensive Road Risk Insurance: This is the highest level of cover available and covers damage or injury to third parties. It also covers your own vehicle in the event of an accident. Comprehensive road risk insurance can also provide additional cover for things like windscreen damage, personal injury and legal expenses.
What Businesses Need Road Risk Insurance?
Traders that work with vehicles or operate in the motor trade industry typically require road risk insurance. This can include but is not limited to:
- Motor traders, including those who buy and sell vehicles or offer repairs and maintenance services.
- Mechanics and body shop garages that repair vehicles.
- Car sales and dealerships that buy and sell vehicles.
- Valet parking companies that handle customer vehicles.
- Car rental companies that rent out vehicles to customers.
- Vehicle transport companies that move vehicles from one location to another.
Road risk insurance is important for these businesses because it provides cover for the risks associated with being on the road such as accidents, damage, and theft.
It also provides protection for third-party liability which means that it covers any damages or injuries that the business causes to another person or their property while using a vehicle.
The specific level of road risk insurance that a business requires will depend on the nature of their activity and the types of vehicles that it works with.
Do I Need Road Risk Insurance As A Motor Trader?
If you are a motor trader then you are likely to require road risk insurance as it is a legal requirement to have at least third-party insurance to cover any accidents while you are on the road.
Having adequate road risk insurance can also help to protect your business’s reputation and financial stability by providing financial protection in the event of claim.
The suitable level of cover for you will depend on your exact business activity. For example, if you operate a car dealership you may require a higher level of cover than if you operate a smaller repair garage. It’s always a good idea to speak with a specialist motor trade insurance broker to ensure that you have the appropriate level of cover.
If you operate from a separate premises to you home that you need to insurance, then you will want a combined policy to wrap everything up in one cost effective policy.
Can I Get Road Risk Insurance For A Private Vehicle?
Insurance for road risks is typically designed for businesses that work with vehicles or operate in the motor trade industry. It’s not generally available for private individuals who use their vehicles for personal use only. Individuals who use their vehicles for personal use typically purchase standard car insurance policies which are widely available from a range of insurance providers.
That being said, if you use your vehicle for business purposes as well as personal use you may be able to purchase a road risk insurance policy that covers both types of use. This is sometimes referred to as a “combined use” policy, which provides cover for both personal and business use of a vehicle. These types of policies can be more expensive than standard car insurance policies as they provide additional cover for the risks associated with being on the road for business purposes.
