There are many things that you need to do before you can start a motor trading business. One of the most vital of these is to set up appropriate insurance for the motor trade.

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Deciding on the best policy for you can be tricky. There is plenty you need to know about how this type of insurance works.

Here are six more of the most frequently asked questions about insurance for the motor trade.

1. Is it ok for me to drive my friend’s car?

According to the government website, it is illegal to drive a vehicle on roads in the UK without appropriate insurance. Therefore, it is your responsibility to make sure that you are insured every time you drive. You may think that a motor trade policy covers you at all times and that you can hop into your friend’s car and drive it. Unfortunately, this is not the case. You are only covered for your own vehicles and for customer vehicles.

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2. What does indemnity limit mean?

When you take out motor trade insurance through a supplier such as, you will be given an indemnity limit. This is the maximum sum that you are likely to reach when all the values of all your vehicles are added together. The higher it is, the higher the premium.

3. What about my other jobs?

You must ask your insurer about this right at the start. If you have another occupation, it may be possible to arrange cover for this as well but that is not always the case. Never assume that you are covered, always ask.

4. Can I store vehicles away from my home?

You may be able to get cover based on the fact you are using your home as a base. In fact, the premiums will be cheaper for this than if you have separate premises. You are only covered, however, if you are on a public highway, parked up as part of a journey or at home. You would not be covered for vehicles stored elsewhere.

5. Is there a protected no claims bonus?

There is usually some type of protected bonus on all policies but there will be conditions that apply.

6. Can I pay the premium by installments?

Most policies have multiple payment options including installments.