Written by Michael Foote, Insurance Expert
Motor trade insurance isn’t a “set and forget” policy. If your business evolves, whether it’s a new location, taking on staff, or handling different vehicles, your insurer needs to know. Failing to update your policy could lead to refused claims or even cancellation.
This article outlines the key changes that typically trigger an obligation to notify your provider.
Change of Premises or Business Address
If you move to a new garage, forecourt or start trading from home instead of a unit, you must update your insurer. Risk is assessed partly by location, including:
- Postcode-based crime rates
- On-site security
- Storage capacity and layout
If you move without telling them, your policy may not apply at the new address.
This is especially important for businesses like MOT stations or mechanics with fixed premises.
Adding or Removing Employees
If you take on an apprentice, bring in a part-time driver, or someone leaves, your insurer must be told. Most motor trade policies require:
- Named drivers
- Employer’s liability (if applicable)
- Disclosure of driving records for all named staff
Not declaring an employee, especially one who drives, can lead to serious issues in the event of an accident or claim.
Working on New Vehicle Types
If your business starts handling higher-value or specialist vehicles (e.g. EVs, prestige vehicles, modified), your risk profile changes. Even occasional work on:
- Remapped vehicles
- Electric/hybrid cars
- Performance or imported models
can be excluded under standard cover unless agreed in advance. This applies to both mechanics and car traders working in specialist segments.
Changing the Nature of the Work
If you expand from simple valeting into repairs, or from vehicle sales into servicing, that needs to be reflected in your policy. You may need:
- Public liability
- Tool or premises cover
- A change in declared trade type
Always describe your work accurately during setup, and update your insurer if your business model shifts.
Buying New Equipment or Taking on More Stock
Most policies have limits on how much stock or how many tools are covered. If you:
- Upgrade your equipment
- Start keeping more cars on site
- Take out finance on assets
you may need to increase your insured sums. If you don’t, you could be underinsured, and claims may be capped well below your actual losses.
