Road Risks Insurance

What is road risks insurance?

Road risks insurance is a motor trade policy that covers damage to a customer's vehicle, and injury to the people driving it, when you or your staff drive vehicles you do not own as part of your business. It applies to traders and businesses involved in servicing, repairing, buying and selling vehicles.

For most road users, road risk cover is built into a standard car insurance policy for their own car. A motor trader cannot rely on that, because the vehicles being driven belong to customers or to the business and change constantly. A road risks policy covers all drivers named on it when using a company or customer vehicle for business use, for example a mechanic test driving a customer's car after a repair.

A road risks-only policy is generally suitable for motor traders operating from home. In some cases it may also be appropriate for smaller operations with business premises. Larger businesses usually need a combined motor trade insurance policy instead.

Who needs road risks insurance?

Any motor trader who drives a customer's vehicle or a business vehicle on the road as part of their work needs road risks insurance. It is a legal requirement for motor traders, and it protects you if something happens to a customer's vehicle while it is in transit.

Road risks-only cover is typically suitable for:

• Car dealers, including those selling high-performance sports cars
• Car jockeys
• Salvage yards
• Mechanics who need to test drive vehicles after work is complete
• Car valeters, tyre fitters and MOT stations

If you only ever work on vehicles at your premises and never drive them, you may still need other motor trade cover, but you should discuss that with a specialist.

What does road risks insurance cover?

A road risks policy covers your own vehicles and your customers' vehicles on UK public roads when used for business purposes. You choose the level of cover you want from three main types.

Some policies also include legal expenses cover to help you defend public liability claims. Policies can be tailored over the phone, so if you let customers test drive vehicles you sell, you can ask for demonstration cover to be added.

What is not covered by a road risks policy?

Road risks insurance only covers vehicles on the road. It does not cover your premises, your stock of vehicles while they are parked up, your tools, or your business equipment. For that you need a combined motor trade policy, which brings road risks together with cover for buildings, stock, vehicles and tools.

With third-party only cover, the vehicle you are driving is not covered for damage and you are not covered for your own injuries. Cover is also limited to drivers named on the policy and to business use, so anyone not named, or any use outside motor trade work, is unlikely to be covered.

Read your policy wording carefully so you know exactly what you are and are not covered for.

How much does road risks insurance cost?

There is no set price for road risks insurance. The cost depends on your experience in the trade, the level of cover you choose, the drivers you name on the policy and your premises. The most accurate way to find out is to complete the quote form and discuss your requirements with the insurers who contact you.

Factors that tend to push the price up or down include:

• Who you name on the policy: driver age, especially young drivers, can increase the cost. Drivers with convictions or past claims may still be offered cover but at a higher premium.
• Level of cover: third-party only is the minimum and usually the cheapest; comprehensive protects the vehicles you drive but costs more.
• Over-insuring: make sure you are not paying for cover outside motor trade use that you do not need.
• How you pay: monthly payments are subject to interest and may cost more than paying annually in one go.
• No-claims bonus: safer drivers and a built-up no-claims bonus will earn discounted cover.

Is road risks insurance a legal requirement for motor traders?

Yes. Road risks insurance is a legal requirement for motor traders who drive customer or trade vehicles on public roads. Third-party only is the minimum legal level of cover, though many traders choose a higher level to protect the vehicles they are driving as well.

Road risks insurance is a motor insurance requirement. It is separate from other legal obligations a business may have, such as employers' liability insurance if you employ staff. A specialist on the panel can talk you through what your business needs alongside road risks cover.

What is the difference between road risks and combined motor trade insurance?

Road risks insurance covers vehicles on the road, while combined motor trade insurance adds cover for the rest of your business. A combined policy bundles road risks with protection for your building, stock, vehicles and tools, and so provides more comprehensive cover.

If you work from home and your main exposure is driving customer cars, road risks-only is often enough. If you have premises, hold stock or own expensive equipment, a combined motor trade policy is likely to be the better fit. Whichever you choose, read the policy wording thoroughly so you understand exactly what you are covered for.

How do I compare road risks insurance quotes?

Complete one short quote form and specialist road risks insurers on our panel will contact you with tailored, no-obligation quotes based on your specific needs. Because cover is arranged over the phone, you can ask for the policy to be adjusted, for example adding demonstration cover or legal expenses, and get advice on the level of cover you actually need. You then purchase your preferred policy directly from the provider.

It is worth comparing quotes each year before renewing, as you may find a cheaper deal from another provider when you switch. Quote Goat is rated 4.8/5 on Reviews.io, with 97% of customers recommending us.