Introduction
Car dealerships play a crucial role in the UK automotive market, handling thousands of new and used vehicles every year. Whether operating a large multi-brand showroom, a small independent forecourt, or an online sales business, dealerships face unique risks.
Vehicles on site may be worth millions of pounds in total, staff and customers are constantly present, and test drives take place daily. To manage these risks, car dealership insurance provides specialist cover that protects vehicles, premises, employees, and the business itself.
Car dealership insurance is broader than standard motor trade insurance, offering additional protections tailored for stock vehicles, large showrooms, and public-facing businesses.
Why Dealership Insurance Matters
Dealerships handle high-value assets and interact with the public daily. Risks include theft, fire, accidents during test drives, employee negligence, and liability claims from customers on site.
- Vehicles in stock are covered for theft, damage, or fire
- Test drives are legally insured
- Premises, equipment, and signage are protected
- Employers liability is in place for staff
- Public liability protects against customer accidents on site
Legal Framework
Road Traffic Act 1988
Requires all vehicles driven on public roads to be insured. Demonstration cover allows test drives.
Employers Liability Act 1969
Requires businesses with staff to carry employers liability cover.
Health and Safety at Work Act 1974
Obligates employers to protect employees and customers.
Types of Cover
Road Risk Cover
Allows vehicles in stock to be driven legally for delivery or test drives.
Stock Cover
Protects vehicles stored on site against theft, vandalism, or natural disasters.
Premises Cover
Covers showrooms, offices, tools, and diagnostic machines.
Business Interruption
Protects income if the dealership is forced to close temporarily.
Frequently Asked Questions
Do all dealerships need demonstration cover?
Yes, if customers test drive vehicles.
Can dealership insurance cover multiple sites?
Yes, with a combined policy.
What if a customer crashes during a test drive?
Claims are handled under demonstration cover.
Conclusion
Car dealership insurance is essential for protecting vehicles, staff, customers, and premises. From independent forecourts to large showrooms, the risks are too great to ignore.
By arranging appropriate cover, keeping accurate records, and investing in security, dealerships can operate with confidence and resilience.