Frequently Asked Questions

To help with any queries you may have regarding Motor Trade Insurance we have set out some frequently asked questions and answers.  These questions and answers are for illustrative purposes. Variations, conditions, exclusions and limitations apply to these policies; please see the full policy for details.

You will find there are lots of differences in cover, conditions and policy limits and the most suitable for you is not always easy to find.

The policy has to fit your needs and the particular sector in which you operate, for example MOT garage owners may have totally different requirements to a used car salesman, so it’s important you get the right cover for you and your business.

Footman James has experience in helping traders such as you, providing Motor Trade Combined Insurance for over 30 years.

Call us on 01384 218021 for a quotation

Do I need Motor Trade Insurance? 

If you have your customer’s vehicles in your care, custody and/or control for the purpose of carrying out your business in the motor trade, you will probably need a Motor Trade policy.  It will allow you to road test, collect or deliver a vehicle prior to and immediately after repair as well as service, MOT testing or conduct any other work on the vehicle. 

A Motor Trade Insurance policy is taken out by someone who typically runs a motor trade business such as an MOT centre, service and repair garage, car dealership, vehicle restoration specialists etc.

The Motor Trade Insurance you need depends on your individual business needs, what area of the motor trade business you operate in and whether you have premises.

The types of policies available are Motor Trade Road Risks and Motor Trade Combined. 

Footman James offer Motor Trade Combined policies and also has a specialist Classic Motor Trade Combined Policy for motor traders who restore, sell, service, repair, and MOT (mainly in classic vehicles.) 

If you have motor trade premises and only take out a Motor Trade Road Risks policy, this may have limitations on cover. Some policies may not provide cover for the vehicles within the proximity of the premises. 

Whatever the size of your business whether an independent garage, restorer, dealership, MOT centre or franchise call us for a quotation on 01384 218021 or email 

Do I need Employers’ Liability Insurance? 

If you employ someone you are legally responsible for their health and safety while they are at work, this includes casual workers, part time workers and temporary staff.  This provides protection for you and your business against damages and legal costs that arise as a result of claims from employees suffering an injury or disease arising out of their employment; This also includes unpaid staff such as voluntary works and persons placed on work experience.

Immediate members of your family who work for you do not count as employees for Employers’ Liability Insurance; this may differ in the case of a limited company. 

Do I need Public Liability/Sales Indemnity/Defective Workmanship insurance cover? 

If you operate your business from premises that customer’s visit you are obliged to provide a safe environment.

Public Liability provides protection for Motor Trade businesses against damages and legal costs that arise as a result of claims from any person, other than employees, suffering an injury, disease or damage to their property that you are liable for. 

Cover can be taken with or without Sales and Service liability. Sales and Service liability covers injury or damage to property arising out of your sales vehicles and parts and your servicing or repair of vehicles.




What does the Material Damage/Property Section Cover? 

We can cover your buildings, contents including tools, machinery, plant, and all other contents (office etc).This also includes vehicles both owned by you and in your custody at your premises, which can also be covered away from your premises. 

It is important that you regularly check that your sums insured are correct as this may lead to underinsurance and subsequent claims payments.

Tenants Improvements can be included (additional premium applies)

Sometimes work needs to be done to a property to make it more suitable for use.  This work falls under the designation ‘tenant improvement’. This type of work is typically governed by an agreement between property owners and whoever is going to use the property in question.  So if the property is damaged, the financial costs of these improvements would be reimbursed to you and not the owners of the property.  You would need to have the material damage section to be able to add this cover.

Business Interruption can be included (additional premium applies)

This is an often overlooked cover but it can be an important one. It covers the loss of income that your business may suffer following an insured incident/event such as fire or flood while the facilities are either closed because of the incident/event or in the process of being rebuilt after it.

Whilst property insurance covers the physical damage to the business, it is designed to put a business in the same financial position it would have been in if no loss had occurred. 

 It typically covers:

•Profits that would have been earned (based on prior month’s financial statements);

•Fixed costs-operating expenses and other costs still being incurred by the  property (based on historical costs);

•Temporary Location – some policies cover the reasonable expenses for moving to, and operating from, a temporary  location;

•Extra Expenses – reimbursement for reasonable expenses (beyond the fixed costs) that allow the business to continue operation whilst the property is being repaired:

•Government – mandated closure of business premises that directly causes loss of revenue. Examples include forced business closures because of government-issued curfews or street closures related to a covered event.  

•This coverage is usually 12 months but can be extended to 18 or in some cases 24 months.

You would need to have the material damage section to be able to add this cover.


What does Money and Wrongful Conversion cover? 

It covers loss of money on the premises during business hours and out of business hours, in transit, in a night safe at the business owners or authorised employee’s residence, crossed cheques and non negotiable money.

Wrongful conversion is to protect you against the financial loss following the purchase of a vehicle from someone who is not the true owner; you will need to have money cover in order to have wrongful conversion cover. Additional conditions may apply. 


Road Risks Section - What are the difference between Comprehensive, TPFT and TPO cover? 

Probably the most important element of a Motor Trade policy, this can be broken down into the following:

There are 3 levels of cover:

•Third Party Only

This is the minimum legal requirement to drive vehicles in the UK on any highway or other road that the public have access to. It covers third parties, including passengers and third party property damage. 

•Third Party Fire and Theft

Third Party Fire and Theft covers a trader for all those things mentioned above in Third Party Only  also included is cover for fire or theft loss or damage of vehicles that are under the motor trader’s control.


On top of the things mentioned above in third party and third party, fire and theft comprehensive cover also includes accidental damage to any vehicles that the motor trader owns or is in his custody or control. 



I have trade plates what do I need to do? 

We need to know the registration number of your trade plates and details of any employee who will need to drive a vehicle using the trade plates in the UK. Please note, UK registered trade plates can only be used in the UK.

What is Engineering Inspection, Legal Expenses and Uninsured Loss Recovery? 

Engineering Inspection Service

Under the Lifting Operations and Lifting Regulations 1998, there is a requirement for a ‘thorough examination’ and certification every 6 or 12 months as required by statute. See for more information. 

A qualified technician will provide this service to ensure you meet your legal requirements and that certain items of plant and machinery are inspected on a regular basis.

Legal Expenses

This is a service to help with legal disputes connected to your business; examples are employment disputes, tax protection, property disputes, data protection, personal injury, statutory licence, wrongful arrest, jury service, pension trustee defence etc.

Uninsured Loss Recovery

It is a legal service that will attempt to recover losses which are not covered by your motor trade policy from a third party or third party insurers.  This helps you recover money you have paid out following an incident that was not your fault.  This can be compensation for personal injury, loss of earnings, the excess on your policy, cost of car hire, taxis, public transport, phone calls, and damage to your clothes.


Do you offer any other types of business insurance? 

Yes, we offer a wide range of business insurance policies including wedding hire, executive hire, funeral hire, vehicle clubs liability insurance and vehicle exhibition and organisers insurance. We also offer multi vehicle classic car and classic bike insurance.

Can you come to see me so I can discuss my insurance needs in person? 

Unlike some insurance providers who prefer an online or telephone only approach, we believe in providing as much support and help to customers and have several account executives with over 100 years combined motor trade insurance experience. These account executives travel the country to give support and are on hand to help motor trade clients who work from premises and would benefit from their knowledge and experience call us on 01384 218021 to discuss

I want to travel abroad in connection with my motor trade business. Do I need a green card? 

Provided you are travelling to an EU country, the minimum legal requirement of that country applies.  This may not be the same level of cover you have in the UK. In most cases we can upgrade this to the same cover you have on your current policy with us. Please contact us for details.

I am under 25 and require motor trade combined policy, can you cover me? 

Yes, we can provide motor trade combined policies for drivers under 25 dependent on details, please give us a call on 01384 218021 to discuss.

Do the policies you offer restrict the number of drivers or can you offer an ‘any driver’ policy? 

We can cater for policies on a ‘named drivers’ basis or ‘any driver’ cover for anybody you give permission to drive in connection with motor trade use. 

We may be able to include social, domestic and pleasure use for the drivers as well, contact us for details if you are interested in this. 


Are there any restrictions on the vehicles I can drive on a motor trade combined policy and their use? 

You are covered to drive vehicles owned by you as the policyholder and vehicles in your custody and/or control in connection with your involvement in the motor trade.

Customer’s vehicle can only be driven for motor trade purposes, you cannot drive them for any other purpose.

If you sell cars and provide ‘test drives’ you will probably need ‘demonstration cover’ on your policy, this insures the prospective customer, providing they hold a full UK driving licence and are accompanied by a person insured on the Certificate of Insurance. 

We may be able to include unaccompanied demonstration cover, commuting, social, domestic and pleasure and additional business use. Please call us to discuss your insurance requirements on 01384 218021.


As a classic motor trader, can I have a motor trade policy that gives me agreed value cover for my personal vehicles? 

Yes, our classic motor trade combined policy covers your classic vehicles for agreed value.  Call us for a quotation on 01384 218021

I have Employers Liability cover and have been asked for my employee reference number (ERN) what is this? 

The ERN is also commonly referred to as Employer PAYE Reference. This is the reference number provided by HM Revenue and Customs (HMRC) under which the employees’ income tax and NI contributions are recorded.  The number is specific to all businesses that employ staff, who are individually paid more than £503 per month.  The first part of the reference is three digits and this is the tax office number that deals with your PAYE, for example 123.  The second part of the reference comes after the forward slash and is your tax office employer reference, for example /AB456.

Will all my vehicles be covered within the policy? 

All vehicles covered on the policy must be registered to the policyholder or held temporarily in the policyholder’s custody for motor trade purposes.  Any vehicles not meeting these conditions are not covered by the terms of the policy.

Can courtesy cars be covered? 

Yes, you will need to disclose these when we arrange cover; an additional premium may be charged. 

How do I get a quotation for Motor Trade Combined Insurance? 

Our Sales Team are happy to give you a quotation, call 01384 218021 to get a free quote and arrange cover.  You can also use our online quote enquiry form and arrange for us to call you back.

I have a Classic Motor Trade Combined Policy, can I protect my No Claims Bonus? 

Yes, we are able to provide Protected No Claims Bonus if you have proof of 4 years claim free motor trade no claims bonus.  Please ask us when you take out the policy or renew it. This can be added during the policy period.

If I have to claim through no fault of my own, will I lose my ‘No Claims Discount’? 

This depends on the circumstances of the claim, depending on whether the claim is classed as ‘Fault’ or Non Fault’.  If the insurer is able to recover all of their costs from a third party, the claim will be classed as ‘Non Fault’. And the no claims bonus can be maintained.  A ‘Fault’ claim occurs when your insurer is unable to recover all costs and the no claims bonus is reduced.  Malicious Damage, Fire and Theft claims are considered as ‘Fault’ claims for the purposes of no claims discounts. No claims discount will be reduced following a claim until this is settled and the insurers have made a full recovery.

What is the Motor Insurance Database (MID)? 

This is a database system that collects and keeps up to date details of who is insured on each vehicle.  This is identified by the registration number throughout the UK.  A European Union Directive made the insurance industry responsible for holding a centralised database containing details of all vehicles in the UK.  It is your responsibility to inform your insurance company of any vehicles in your custody or control under your motor trade policy, that will be used on a highway or other road to which the public have access. 

As a motor trader you currently do not need to let your insurance company know of vehicles held in your custody or control for less than 14 days.

For more information on data submission go to,, MIIC in general, and various other issues. 

What is Continuous Insurance Enforcement (CIE)? 

CIE is a new and additional compliance and enforcement approach to reducing the level of uninsured driving.  Previously it has been an offence to use a vehicle without insurance.  From early 2011 it is now an offence to keep a vehicle without appropriate motor insurance unless it has a valid Statutory Off Road Notification (SORN).  Under CIE the registered keeper(s) of a vehicle (s) will be sent an Insurance Advisory Letter (IAL) if it appears that they have no insurance.  The letter will set out what options the registered keeper can take to comply with CIE.  If the registered keeper does not comply, their details will automatically fall to the DVLA for enforcement action.

Vehicles that are registered as ‘in trade’ with the DVLA are not exempt but are excluded from CIE.  Motor Traders have 90 days before they need to register themselves as the keeper of a vehicle if not disposed of and make a SORN, if not insuring the vehicle. For more information go to:

How can I buy a Motor Trade Combined Policy Insurance? 

Our Sales Team are happy to give you a quotation, call 01384 218021 to get a free quote and arrange cover.  You can also use our online quote enquiry form and arrange for us to call you back.