Understanding Motor Trade Public Liability Insurance & Service Indemnity: What Every Business Should Know

Whether you’re a sole trader or a limited company involved in motor products, managing risk is essential. Two of the most important types of protection you can have are public liability and service indemnity insurance. While they sound similar, they cover different aspects of your operations, and understanding the difference could save you from costly legal headaches.

What Is Public Liability Insurance?

The Motor Trade Public Liability Insurance protects your business against claims made by third parties for injury. If someone slips and falls on your premises, public liability insurance can help cover the costs of legal fees, compensation, and related expenses.

Real-World Example:

You’re a mobile mechanic and leave your toolbox on the pavement, next to where you are working. A pedestrian walks by and trips over the toolbox, causing themselves harm. Public Liability insurance for motor trades steps in to cover the cost of the injury and any legal action that may follow.

What Is Motor Trade Service Indemnity (Professional Indemnity) Insurance?

Motor trade service Indemnity insurance covers you when a client claims they suffered a loss due to your professional service or negligence. It's especially vital for a business that provides mechanical repair to a vehicle, as we all know, accidents can happen.

Real-World Example:

You’re a mechanic, and a customer comes in and needs a new set of brake pads. You then fit these new brake pads, but are unaware that they aren’t fitted correctly. The customer comes to pick their vehicle up, they then drive a mile down the road, their brakes don’t work, and therefore have an accident. They then come back to you and prove your negligence and blame your repairs, and threaten legal action. Service Indemnity insurance can help you cover the legal costs and any compensation awarded. 

Did You Know That Employers' Liability Is A Legal Requirement?

If you employ anyone, even part-time, you must have at least £5 million in cover, or face fines of up to £2500 per day.

Employers’ liability covers you if an employee is injured or falls ill due to their work. It pays for legal costs and compensation, protecting your business from expensive claims.

Why Public Liability Insurance For Motor Trade Matters

• High Risk Environment: Lifts, tools, oils, and chemicals make workshops risky
• Manual Labour: Back injuries, cuts, or slips can lead to claims.
• Road Risks: Staff collecting or test-driving cars face added danger.

The Bottom Line

Protect your people. Protect your business. Make sure you have the right cover in place, or risk paying the price. If you are still unsure about the insurance you need for your motor trade business, contact us, and a member of our team will help guide you in your decision. 

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