United Kingdom. Motor trade businesses
Compare motor trade insurance by what it actually covers
Motor trade policies are quoted as one product and sold in about four shapes, and buying the wrong shape is how traders end up uninsured on the exposure that actually bites. The compulsory part is narrow and specific: section 143 of the Road Traffic Act 1988 says a person must not use a motor vehicle on a road or other public place unless a compliant policy is in force in relation to that use by that person. Everything else, premises, stock, customers' vehicles and staff, is a separate decision. This page sets out the four shapes and what each leaves out.
| Option | ||||||
|---|---|---|---|---|---|---|
| Road risks only A trader with no premises: buying, selling and moving vehicles | Sole traders and small dealers working from home, and anyone whose only exposure is driving vehicles they trade in. | Driving vehicles held in the course of the trade, on a road or other public place. That is the exposure section 143 of the Road Traffic Act 1988 makes compulsory: a person must not use a motor vehicle on a road or other public place unless a compliant policy is in force in relation to that use by that person. | None. Stock standing at your home, tools and any building are outside this cover entirely. | Named drivers, usually. Any-driver terms exist and are priced very differently, and age and licence conditions are where declined claims concentrate. | Vehicles you hold must appear on the Motor Insurance Database, which is what enforcement and askMID check against. A trade policy that has not fed the database leaves your stock looking uninsured. | Does this cover cars driven for demonstration, delivery and collection, and does it cover a vehicle I have bought but not yet paid for? |
| Road risks plus premises A dealer with a forecourt, unit or workshop | Dealers holding stock somewhere other than a private driveway, and anyone with a lease or a landlord. | As road risks, and normally on the same basis. | Buildings, contents, tools and stock on site, plus the stock itself against fire and theft. Stock cover is normally on a stated maximum value, and that figure is the one that gets exceeded quietly as a business grows. | Employees driving in the course of the business. Employers liability is a separate legal requirement for employers and is not part of a road risks policy. | MID as above, plus a schedule of premises and a stated stock limit that the insurer will hold you to at claim. | What is the stock limit, is it per vehicle or in total, and what happens if I exceed it during a busy month? |
| Combined motor trade A full business: sales, servicing, MOT, bodyshop | Businesses doing more than trading vehicles. Once you work on customers' cars, the risks change shape. | Trade vehicles and customers' vehicles, which is the distinction that matters. Driving a customer's car for road test or collection is a different exposure and it is not automatic on every policy. | Buildings, contents, tools, plant, stock, and normally business interruption. | Employees, with employers liability alongside as a legal requirement for employers, plus public liability for customers on site and product liability where you supply parts. | MID, certificates for each compulsory class, and evidence of any specified security or working conditions the insurer imposed. | Is work on customers' vehicles covered while in my custody, on road test, and while parked overnight? |
| Traders policy add-ons Anyone whose exposure is not the vehicle itself | Traders exposed through what they sell rather than what they drive. | Not applicable; these sit alongside a road risks or combined policy. | Varies by add-on. Common ones cover defective workmanship, sale of goods exposure, and vehicles in custody for repair. | Not applicable. | Endorsements on the schedule. An add-on discussed on a call and not endorsed does not exist. | Which of these are endorsed on my schedule today, and can you send the schedule showing them? |
What each shape of UK motor trade cover includes, 2026
Last updated
Traders compare quotes across shapes without noticing they are different products. This table puts the four side by side on what they let you drive, what they protect on the ground, and how cover is evidenced.
The compulsory insurance requirement is quoted from section 143 of the Road Traffic Act 1988 as published on legislation.gov.uk, read on 15 August 2026 and cited below; the statute is quoted rather than summarised because it is the only part of this subject that does not vary by insurer. Everything else describes the structure of cover as it is commonly written in this market and is not a statement about any particular policy: what a given schedule covers is a matter for that schedule. No premium appears anywhere on this page, because motor trade premiums are rated individually on claims history, drivers, stock value and trade activities, and a published figure would be illustrative rather than an offer. Employers liability is described as a legal requirement for employers; whether it applies to your arrangements is a question to take advice on.
| Shape of cover | What it lets you drive | Premises and stock | Who can drive | How cover is evidenced |
|---|---|---|---|---|
| Road risks only | Driving trade vehicles on a road | No | Named drivers usually | MID entry |
| Road risks plus premises | As above | Buildings, contents, stock to a stated limit | Employees driving | MID plus premises schedule |
| Combined motor trade | Trade AND customers' vehicles | Full, usually with business interruption | Employees, with EL alongside | MID plus certificates per class |
| Add-ons | n/a, sits alongside | Varies | n/a | Endorsement on the schedule |
| Employers liability | n/a, separate cover | n/a | Legal requirement for employers | Certificate per policy year |
| Demonstration and delivery driving | Trade vehicles off-site | No | Named or any driver per schedule | Endorsement on the schedule |
- Section 143 of the Road Traffic Act 1988 requires a compliant policy in force in relation to the use of a motor vehicle by that person, on a road or other public place.
- The statutory defence is narrow: an employee using an employer's vehicle who neither knew nor had reason to believe there was no policy in force, and all three conditions must be met.
- Road risks cover excludes premises, stock and tools entirely, which is the most common gap for a trader working from home.
- Driving customers' vehicles is a distinct exposure from driving trade stock, and it is not automatic on every motor trade policy.
- Vehicles held in the trade must appear on the Motor Insurance Database, which is what askMID and enforcement check against.
Cite this page
“What each shape of UK motor trade cover includes, 2026”, Motor Trade Insurance Compare, https://motortradeinsurancecompare.co.uk/ (updated 2026-08-15). The compulsory insurance requirement is quoted from section 143 of the Road Traffic Act 1988 as published on legislation.gov.uk, read on 15 August 2026 and cited below; the statute is quoted rather than summarised because it is the only part of this subject that does not vary by insurer. Everything else describes the structure of cover as it is commonly written in this market and is not a statement about any particular policy: what a given schedule covers is a matter for that schedule. No premium appears anywhere on this page, because motor trade premiums are rated individually on claims history, drivers, stock value and trade activities, and a published figure would be illustrative rather than an offer. Employers liability is described as a legal requirement for employers; whether it applies to your arrangements is a question to take advice on.
How this compares, and why there are no prices
This compares the SHAPES of motor trade cover rather than named insurers, because the shape is what traders get wrong and the shape is what can be described accurately. Premiums here are rated on your claims history, your postcode, the drivers, the stock value and what you actually do, so any figure published on a page like this would be illustrative rather than an offer.
Order follows scale, from a sole trader with no premises through to a full combined policy. Reading down it is the fastest way to find where your own business stops being covered by the cheaper shape.
The compulsory element is stated from the statute itself rather than paraphrased from a broker's summary, because it is the one part of this that is not a commercial matter.
We do not recommend a policy or an insurer and we place no insurance. Tell us what the business does and brokers who write motor trade will quote you directly.
- Road risks only Road Traffic Act 1988, section 143
- Road risks plus premises FCA, the Financial Services Register
- Combined motor trade FCA, the Financial Services Register
- Traders policy add-ons FCA, the Financial Services Register
Motor Trade Insurance Compare is an independent introducer site operated by Ellul Solutions Ltd. We are NOT authorised or regulated by the Financial Conduct Authority, and we are not an insurer or a broker. We do not advise, arrange or recommend any policy, cover or firm: we introduce you to insurance brokers by passing your details to them, and they deal with you directly. We may be paid a commission for that introduction by the firm we introduce you to, and it never changes the premium you are quoted. Nothing here is insurance, legal or financial advice. No premium is published on this site because motor trade cover is rated individually. The statutory position is quoted from the Road Traffic Act 1988 as published on legislation.gov.uk; what any particular policy covers is a matter for that policy's schedule, and whether employers liability applies to your arrangements is something to take your own advice on. Check any broker on the FCA's Financial Services Register before paying a premium.
Want quotes from brokers who write motor trade?
Tell us what the business does, whether you hold stock anywhere and who needs to drive. Brokers who write motor trade will contact you directly.
Straight answers
What does motor trade insurance actually have to cover?
The compulsory part is narrow. Section 143 of the Road Traffic Act 1988 requires that a person must not use a motor vehicle on a road or other public place unless a compliant policy is in force in relation to that use by that person. That is the driving exposure. Premises, stock, tools, customers' vehicles and employers liability are all separate decisions and none of them is included automatically in a road risks policy.
What is the difference between road risks and combined cover?
Road risks covers driving vehicles held in the trade and nothing else. Combined adds premises, contents, tools, stock and usually business interruption, and normally covers work on customers' vehicles. Three events typically take a trader out of road risks: taking premises, starting to work on customers' cars, and employing anyone. Each one leaves a real exposure uninsured and none of them prompts a policy review on its own.
Can anyone drive on a motor trade policy?
Usually not. Most policies at the smaller end are written for named drivers only, and any-driver terms are priced very differently. Age, licence duration and endorsement conditions are standard and are where declined claims concentrate. Add a new person in writing before they move a vehicle and keep the broker's confirmation, because that email is what matters if the car is damaged the same afternoon.
What is the Motor Insurance Database and why does it matter?
It is the record enforcement and services like askMID check against. Vehicles held in the course of your trade should appear on it, and if they do not your stock looks uninsured regardless of what your paperwork says. Between the policy schedule and the MID entry you can prove both that the driver was covered and that the vehicle was insured, which is the pair of facts anyone will ask for.
Is there a defence if I am caught without cover?
A narrow one. Under the Road Traffic Act a person charged with using a vehicle avoids conviction only if the vehicle was not theirs and not held under a hiring or loan contract, they used it in the course of employment, and they neither knew nor had reason to believe that no compliant policy was in force. All three conditions must be met, so it protects an employee who was genuinely misled rather than a business owner who did not check.
How much does motor trade insurance cost?
We publish no premium, and that is deliberate. Motor trade cover is rated individually on claims history, the drivers and their ages, the postcode, the stock value and what the business actually does, so any figure on a page like this would be illustrative rather than an offer. What can be compared usefully is the SHAPE of cover, which is what this site sets out; get quotes on the same shape and the numbers become comparable.
How do I check a motor trade broker is legitimate?
Search the firm on the FCA's Financial Services Register, which is free and public, before sending documents or paying a premium. Arranging insurance is a regulated activity, so an authorised firm should be there. The FCA's scam guidance describes the pattern to watch for and it fits this market: urgency, an upfront payment, and an entity whose name is close to but not identical to the firm you were introduced to.
Read next
Every figure sourced and dated.
- Road risks or combined: where the cheaper policy stops
Road risks covers driving trade vehicles and nothing else. Where a growing motor trade business crosses out of it, and what it stops covering.
- Who can drive on a motor trade policy
Named drivers, any driver and age conditions are where motor trade claims get declined. What to check before someone else moves a car.
- Regulation, brokers and what protects a motor trader
Arranging insurance is a regulated activity, so your broker should be on the FCA Register. What that gives you, and what to check first.
Sources
Match the shape before you compare the price
Four shapes of motor trade cover, what each lets you drive, and the three events that take a trader out of the cheapest one.