Navigating through the different types of insurance policies can be frustrating and confusing. For most people, the lingo is unclear or hard to understand. When searching for insurance, you’ll need to know what each policy covers, the extent of the cover, and the cost of premiums. Everything needs to be stated in simple terms, helping you choose which policy is right for you. This however is not always the case.
Take for instance Compulsory Third Party or CTP insurance and Motor Trades insurance? Know the difference? CTP is compulsory when registering a vehicle in all states. It provides compensation for the third party, or the person that is not you, in accidents where your vehicle is involved. Motor trades insurance does involve vehicles, but is something entirely different.
What is Motor Trades Insurance?
A Motor Trades Insurance policy covers people in the motor trades from a number of risks. This means car dealerships, mechanics, electricians, smash repairers, body shops, scrap yards, tyre fitters and service stations can get a tailored motor trade policy for their particular business. Business owners and employees can also be covered, either under a single or separate policy. Companies in the motor trades can incur unexpected losses due to property damage, fires, theft, machine and equipment breakdowns. In addition, cover for any potential damage to vehicles on loan and customers’ vehicles while at the premises, and any claims for faulty workmanship resulting in loss, are well packaged in different motor trades policies.
Risks in the Motor Trades
A with such an encompassing area, the motor trades share some common risks. Policies can be tailored to cover all risks types or those that the company or owner deem as potential liabilities:
- Public and Product Liability – This covers claims made against you by a third party, a client for instance, from negligent acts that result in personal or damage to their property. Public liability refers to injury or damaged property to members of the public while on the business grounds.
- Professional Indemnity – If your business does vehicle inspections and issues Roadworthy Certificates, any loss, injury or damage due to shoddy workmanship is covered. Any claims made against you in such events are dealt with.
- Business Interruption – If daily proceedings at your business are interrupted by unforeseeable events, like damage resulting from fires, lightning, floods or storms, business interruption insurance can reimburse part or all of the losses for the duration of the event. Business interruption can also cover third party claims due to losses incurred by prolonged servicing periods.
- Machinery and Equipment Breakdowns – Any damage to expensive machinery and equipment on your premises, like compressors, battery chargers, hoists, lifts, diagnostics equipment, computers and so on is covered.
- Theft – Money stolen from your business premises is covered. In addition, any items like customer’s vehicles, spare parts or equipment stolen during a burglary are covered.
- Customer Vehicle Insurance – Owners and employees in the motor trades can damage customer’s vehicles while it’s on company grounds or on public roads due to the need for test driving to establish if previous faults or defects are removed.
- Property Insurance – covers all items of the business, company premises, listed items and equipment, and any contents of value.
- Glass – Showrooms and workshops can insure their property from unintentional damage to shop windows, glass shelving and signage.
- Worker’s Compensation – Any injury to employees while working at the company during business hours is covered.
Benefits of a Motor Trade Policy
As a business owner in the motor trades, a comprehensive motor trade policy can cover all the potential risks above or any other that you deem as liabilities. This ensures the normal daily proceedings of your company. If damage, injury or losses do occur, you can rest assured that there are no out-of-pocket expenses.
Alternately you can create a policy that best suits your needs. For instance, you can insure yourself and your business for public and product liability, professional indemnity, customer vehicle insurance and machinery and equipment breakdowns if you run a business with high movement, but leave out policies tailored to cover theft of glass insurance if you have absolute faith in employees, or that no recent break-ins are reported in your area. What you choose to insure is totally up to you.
Insurance agencies will have packaged policies that cover some or all of the risks listed above. If you decide to go with an insurance agent, make sure what you are covered for, the extent of cover, and how claims are processed if any mishaps, damage or injury does occur. To get a policy tailored to your needs, and the business you own, a better choice might be to go with an insurance broker. They will clearly explain policies, the cost of premiums, and may negotiate lower prices.
Having no policy in effect can have dire consequences. Any equipment or items damaged or stolen will incur expenses and loss of business. If anything does happen due to negligence, or faulty workmanship, be prepared for long and costly court proceedings. This can have a detrimental effect on your business.