Motor Trade: Road Risk vs Combined Insurance

car on road

Motor trade insurance is split into two main levels of cover: road risk and combined. Depending on the scale and types of services your motor business provides, you will either need road risk insurance or motor trade combined cover.

It isn’t always easy to understand which level of insurance you need. So, as expert motor trade insurance brokers, we’ve put together a handy guide, explaining the difference between road risk and combined cover.

What is road risk insurance?

Road risk insurance is the minimum legal level of cover required for motor traders, car repair businesses, and motor sales companies.

A road risk policy insures motor traders for driving customer vehicles on the road. For example, if you’re driving from the repair garage to a driveway, picking up or returning a vehicle to a customer, or testing a car following repair work.

Please bear in mind that a road risk policy insures the trader, not a single car. It only protects named drivers, i.e. those listed on your policy.

It is also important to note that road risk insurance does not pay out the full value of a vehicle in the event it is written off or stolen – it only pays the trade price of the car.

Who should buy road risk insurance?

Road risk cover is perfect for small motor trade businesses; especially if you operate from your home address, rather than business premises. For example, road risk insurance would suit part-time traders working from home, and mobile mechanics.

If customers leave their cars in your care, or if you have several stock vehicles, you will need road risk insurance as a minimum.

Similar to private car insurance, a road risk policy is available under three levels of cover:

  • Third-party
  • Third-party, fire and theft
  • Comprehensive

However, road risk cover is often offered at a more basic level than private car insurance, as personal effects and windscreen cover might not be included.

Road Risk Third Party Only (TPO)

This is the most basic level of road risk insurance. These policies only cover damage or injury to a third party if you are involved in an accident where you are at fault. Third-Party Only insurance also doesn’t cover damage to your vehicle or injury inflicted upon you. TPO is the minimum motor trade policy required by law, so we recommend motor traders’ take additional precautions.

Road Risk Third Party, Fire & Theft (TPFT)

TPFT is a level higher from TPO. It differs in providing cover against theft of a vehicle in a motor traders’ possession, and damage caused by fire. If you suspect vehicles could be stolen, we recommend considering this cover.

Road Risk Comprehensive

Comprehensive insurance includes the same level of cover as TPO and TPFT, plus any damage caused to a car owned by, or in the custody of, the motor trader. A comprehensive policy provides cover if you damage a customer’s vehicle while repairing or testing it.

What is combined motor trade insurance?

A traders combined policy provides the same cover as road risk insurance (e.g. the ability to drive customer cars) but offers additional protection for your business premises/garage.

Combined insurance can include cover for:

  • Buildings insurance for your business property in the event of damage, floods, subsidence, or fire.
  • Damage/theft of vehicle stock, equipment, cash and tools stored at your business premises.
  • Business interruption insurance (financial losses).
  • Employer Liability and Public Liability.

Who should buy combined motor trade insurance?

A combined motor trade insurance policy is suited to motor traders that work in business premises, e.g. a service and repair garage, body shop garage, car dealerships, or MOT station.

Do you want to protect your business and staff in the event of injury or accident at work? If so, you should also consider adding employer’s liability cover onto your combined policy.

Public liability is equally useful to businesses that often have customers on their premises; again, designed to legally and financially protect you should an accident occur.

Suppose you want to allow prospective customers to test drive a vehicle without a member of staff present. In that case, you’ll need unaccompanied demonstration cover, which is offered as an add on to your policy.

Do I need motor trade road risk or combined cover?

Road risk insurance is best suited for motor traders working from a home address or operating on the move. Beware, however, that it doesn’t protect business premises or garages.

If you are a larger motor trade business working from a garage you own or lease, a combined motor trade policy is the best option. It will give you peace of mind that you’re covered should an accident occur.

If you’re still unsure or want to know more about the motor trade policies on offer, our advisors can help you. Call our team on 01625 854 832.


  • Does a road risk policy cover me to drive any vehicle?

Yes, however, it is essential to note that road risk cover only protects named drivers. If you have someone else working for you and they are not listed on a policy, they are not allowed to drive the vehicle in any circumstances. Furthermore, any vehicles used for social, domestic or pleasure must be added to the MID along with any trade plates used when transporting cars or accompanying drivers on demonstrations.

  • Can I change from road risk only to combined, and vice versa?

Yes, naturally, as your business grows, you will need additional cover to protect all your motor trade activity. You must alert your insurance provider each time there is a significant change to business operations, whether that be upgrading or downgrading your activity or workforce. They can then advise you on the necessary and optional changes to your insurance policy.

  • Are combined traders’ policies more expensive?

The price of a policy depends on a variety of circumstances – there is no one-price-suits-all or average cost approach. However, a trader combined policy will likely be more expensive than a road risk policy due to the extra cover included, and the greater level of risk involved.

  • Can I add on cover to my policy before I am due for renewal?

Yes. If you spot a gap in cover on your motor trade policy or begin new activity within your business, you can complete a mid-term adjustment. There is usually a small fee involved, but it means you have the cover you need without having to wait until your renewal date.

  • Can you insure sports cars, performance vehicles, or classic cars?

It is sometimes challenging to obtain insurance for higher-risk vehicles, such as sports, performance or classic cars. This is due to the increased costs involved in the event of an accident or incident. At ChoiceQuote, we strive to find you the best possible deals by working with a variety of insurers, who have access to a wide range of policies.