What is motor trade internal risk?

21 Sep, 2022

Motor trade internal risk is a type of insurance that covers non-road risks for motor trader, such as liability cover or stock on site.

Think of road risk and internal risk as two halves of the same motor trade insurance apple. Road risk insurance is to protect third parties if you cause damage while driving vehicles in the course of your business, or to cover you if the car in your possession is damaged on the road. Internal risk would cover the things that could be a problem for you at your place of work, whether that’s a garage, forecourt or your home address that your business is run from.

So, motor trade internal risk could include your tools and machinery on the premises, public liability insurance, employers’ liability, cash on premises, and other things to protect your business at the place where you run it.

Combined motor trade insurance, meanwhile, is like we’ve taken that apple and dipped it in toffee – it brings together both road risk and internal risk, and can cover the building you’re operating out of too.

Do I need motor trade internal risk cover?

Internal risk cover is ideal for motor traders who are starting to branch out from working out of their home, and so need more protection for their business.

Your work premises needs to be properly insured for the activities you do there, and for possessions and stock kept there. If you have employees, you also need employers’ liability cover, which can be included in motor trade internal risk. If you have a dedicated work premises that gets visited by customers, then you would be sensible to get public liability insurance too, something else that can be included in internal risk cover.

If you are a sole trader and customers do not visit you at your place of work, you might not need liability insurance. But, you can include other protection such as damage to vehicles at the premises, or business interruption.

What kinds of motor trade business need internal risk cover?

There are lots of different kinds of motor trader who can benefit from internal risks cover, but these definitely include:

  • Garage owners carrying out repairs and MOTs
  • Valeting services, whether travelling to customers’ homes or working from a business premises
  • Traders buying and selling vehicles
  • Wrapping, cosmetic and refurb services for vehicles of any kind

Motor trade internal risk cover is especially helpful if you work out of a premises that you don’t own, for example you rent a forecourt or garage or other space for your business. With internal risks you can cover the activities you do in that space, even though you don’t get buildings cover because you don’t own the building.

How do I know if my motor trade business is properly covered?

When setting up a motor trade business, it’s a good idea to speak to an expert to make sure your business is fully protected. Our team of experienced motor trade insurance brokers can talk through your business with you, and help you identify the places where you might be exposed to risk. We can also advise you on the legally required insurance cover to operate your motor trade business.


Want to talk with one of our experienced motor trade insurance advisors about your cover needs? Send us a message below and we’ll give you a ring.