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Motorcycle trade insurance

If you own or run a motorcycle trade business the right insurance policy can prove invaluable if anything ever goes wrong. Here’s what to think about when it comes to choosing the right policy for you and your business.

What is motorcycle trader insurance?

It’s a type of motor trade policy geared towards anyone running a motorcycle business, for example:

• New and used motorcycle dealerships
• Motorbike repair, servicing and MOT businesses
• Motorbike bodywork specialists

Insurance could help to protect your business against financial loss if you need to make a claim – for example if your stock was stolen or damaged. Policies can also pay out for legal fees and compensation if someone takes you to court.

If you didn’t have motorcycle traders cover in place you’d be expected to meet all these costs yourself if and when something went wrong.

Do I need motorbike trade insurance?

Traders insurance can offer a crucial lifeline and help your business get back on its feet if it’s suddenly hit by an unforeseen event – like a fire or a burglary.

Depending on your business, you may also need certain types of trade insurance by law, such as road risk insurance if you ride your customers’ motorbikes or employers’ liability if you employ staff.

What risks does motorcycle trade insurance cover?

Like other types of business insurance, you’ll be able to bundle together different types of cover to give yourself the protection you need.

Features to think about include:

• Road risk – Insures you to ride bikes that don’t belong to you, whether they are your customers’ motorbikes or your business’s own stock. This type of cover is required by law if you’re riding bikes that don’t belong to you, so if you offer a collection service or test ride a customer’s bike after repairing it, for instance, you’ll need third party road risk insurance at a minimum.
• Trade plate insurance – covers motorcycles that are using your trade plates. This is often included as part of your road risk cover but you should always check to make sure.
• Public liability – covers legal fees and compensation if a member of the public has an accident because of your business and takes you to court.
• Employers’ liability – covers costs if an employee becomes ill or is injured through work.
• Product liability – pays out for court costs and compensation if a part you fit turns out to be faulty and causes an accident.
• Business premises and contents cover – insures any property your business owns such as an office, garage or workshop. Office equipment like computers, printers, desks and cabinets should be covered by a contents policy.
• Business interruption – makes up for lost income if your business has to close because of an unforeseen event like fire.
• Defective workmanship – pays for legal help and compensation if your business is accused of poor workmanship.
• Tools and equipment – protects any machinery, equipment and day to day tools.
• Vehicle stock – covers unsold motorcycles you have in your showroom. You’ll usually be compensated at trade cost rather than retail price.
• General stock – covers any other stock you have, for example spare parts if you run a repair garage.
• Demonstration cover – insures customers to test ride motorbikes.

What level of cover do I need?

The level of cover you need will usually depend on your own particular business, and in most cases you’ll be able to agree this with your insurer.

The only two types of insurance that come with statutory minimums are:

• Road risk – you must have third party only (TPO) at the very least if you’re riding other people’s bikes. Bear in mind TPO only pays to repair other people’s property, it won’t cover repairs needed to the bike you’re riding.
• Employers’ liability – if you employ anyone you must have at least £5,000,000 worth of cover. If you need employers’ liability but are caught without it you could face a daily fine of £2,500.

Other types of insurance are based on an amount, known as the ‘sum insured’ or the ‘indemnity level’, which will either be set by the policyholder or determined by the insurer’s standard minimum indemnity level.

How can I lower the cost of my motorbike trade policy?

Cost ultimately depends on the types of cover you choose and the amount of cover you need, but you can help to reduce your premiums by:

• Paying for your motorcycle trade insurance on an annual basis rather than monthly.
• Accurately working out the value of items like stock and property.
• Keeping your premises and stock as secure as possible.
• Increasing your voluntary excess.