Motor Trade Insurance? It’s easy when you know how – and who! Part 2

Do you run a motor trade business, of any size… or are you thinking of starting one? Do you specialise in classic or prestige vehicles? We asked Kingfisher Ambassador and TV presenter Paul Cowland, a man that’s been working in, running and owning showrooms, garages and workshops for 32 years to lay down a few more of his top hints and tips.

Fellow motor traders! In my last blog, we got stuck into the basics of who needs motor trade cover and what it is. If you haven’t read that one yet, go and have a look – it’ll save you a headache later. This time we’re digging into the real nuts and bolts: making the policy fit your trade, why you need a proper specialist broker on your side, and that sneaky risk most of us still shrug off until it’s too late… cyber.

Tailor Your Policy to Your Specific Trade

While it might sound convenient at the point of purchase, the simple fact is, that ‘one-size-fits-all’ policies just don’t work. Full stop. I’ve seen too many traders try to squeeze themselves into a generic motor trade policy and then discover, usually at the worst possible moment, that the cover simply doesn’t stretch to what they actually do every day. This is definitely one of those times in your professional life that you need to be shopping on value, rather than cost.

Take loss of MOT licence cover. If you’re a garage that relies on the test and the work that it brings as part of your workshop cash flow, then a situation that causes you to lose your accreditation, however that situation may arise, can be the difference between staying open and closing the doors for good. Take a moment to look at which aspects of your business would be the most dramatic if you lost them from your billable hours, and then take a serious look at protecting yourself from that outcome. It’s why specialist brokers are so important when choosing tailored insurance. You need to chat to someone who will ask the right questions and get you thinking about ALL the potential risks.

Then there’s wrongful conversion – when a dealership takes a car in on part-exchange, does everything by the book, and later finds out the so-called customer didn’t actually own it. By being victim to nefarious means and false documentation, it is possible to take in a part-exchange that doesn’t belong to the person you’ve done the deal with. Suddenly you’re staring at a sizeable claim, with potential ongoing legal ramifications that a detailer or a restoration specialist would simply never face. This is a prime example of where obtaining cover that’s been designed to your business can help.  

The message is simple: tailor the cover to the specific operations you carry out, not just to the size of the premium. And while we’re at it, classic and prestige traders, listen up. The basis of settlement matters. In almost ALL cases you’re far better off with market value cover than trade value, should any issue arise. Whether it’s your stock or a client’s car, while trade value might look cheaper on paper, when you’re dealing with the sort of cars we love, market value is what puts you back where you need to be… and quickly. Your reputation and market standing is at stake. Don’t risk it.

Work With a Specialist Motor Trade Insurance Broker

As I’ve mentioned above, a specialist broker isn’t just desirable, I think it’s an ESSENTIAL! Why? Because they understand the niche risks that sit across our different sectors. They’ve seen all of the outcomes before and taken clients through every possible pitfall and helped them settle every type of claim. Let their extensive knowledge and experience pick up all the problems for your business before they happen. If you’re starting out in the trade, don’t even think about tailoring a premium without one, and even if you’re a grizzled motor trade veteran with decades under your belt, I guarantee they can still teach you a few tricks. Lean on them. It’s why they get up in the morning. 

A general insurer sees “cars” and stops thinking. A specialist broker sees classic storage, prestige sales, restoration workshops, mobile detailing, recovery, the lot – and they know where the gaps usually hide and how to ring-fence your operation from every potential problem.

They’ve got access to the tailored policies and the right insurers. That means expert advice on coverage gaps, proper help when a claim lands on your desk, and the ability to adjust the cover as your business grows (or changes direction).

Let’s look at a real-world example that I very much identify with. In most classic car dealerships, the owners of these companies will often have their own personal collections sitting alongside the stock. They may well want the benefit of full agreed value on their own cars – something that most standard trade insurance policies simply don’t offer.  A specialist motor trade broker brings genuine differentiation when compared to general insurers, and that knowledge is everything. For example, the policies at Kingfisher Specialist Motor Trade offer agreed values on your private collection – meaning you can receive the true value of what your car or collection is worth rather than market value.

 Avoid the generic policies that miss the key protections we actually need. I’ve been there. It’s not fun. And then the saving that I thought I’d made with a cheaper premium was wiped out many times over.

Don’t Overlook Cyber Insurance

Increasing digitalisation in the motor trade is never slowing down. Online bookings, online payments, customer databases – most of us are running more of the business through a screen than we ever used to. That brings cyber risks: data breaches, ransomware attacks, payment fraud. All of them real, all of them capable of stopping a business dead. Remember when Marks and Spencer got taken down a year or so ago? It closed every store as their supply chain froze. They lost millions in a just a few days. What would happen to your business if your parts system went down? Or your sales leads didn’t come through? It’s extraordinarily easy to electronically hi-jack a modern garage business.

Why are motor traders vulnerable? Smaller businesses often lack robust security. And here’s the bit that catches people out, data is not just on your computer. Physical files also count. Those old order books, the paper customer cards, the handwritten notes, the job cards… they still hold personal data and they still need protecting.

What cyber cover includes is practical stuff: data recovery, business interruption if systems are taken down, legal costs and fines. And the good news? It can be relatively cheap. Position cyber insurance as essential, not optional. In this day and age, it’s as important as the cover on the cars themselves.

There’s still more to come in this series, so stay tuned. In the meantime, if any of this is ringing bells (or causing mild panic), give my colleagues at Kingfisher a ring. They already know my business inside out and have notably upped my levels of protection for a very sensible premium. I know that they’ll provide the same in-depth service for you.

Click here to request a callback from the Kingfisher Specialist Motor Trade team or give them a call on 0207 655 8040.

About Paul Cowland