The evolving nature of Motor Trade risks – are you up to date?

Back in the 1890’s it was a legal requirement for a man with a red flag to walk in front of any self-propelled vehicle on a public road at no more than 4mph.

NIG also has a rich heritage of insuring the Motor Trade industry and whilst we don’t walk out in front of policyholders’ vehicles waving a red flag to keep them safe these days, our in-house Risk Control Team has vast experience assessing risks in this sector, giving NIG deep insight into the day-to-day threats facing Motor Traders and their business operations.

Understanding Motor Trade risks

Given the wide range of activities and scenarios at any given Motor Trade premises it’s essential to understand the risks. Claims statistics indicate that the real costs when things go wrong far exceed financial implications:

  • 7,000 reportable injuries and 33 deaths in the last 5 years [1]
  • £427,825 average cost of large fire claim – vehicle repair premises [2]
  • £541,316 average cost of large fire claim – vehicle sales premises [3]

In addition, the industry is constantly developing and innovating so it’s important to keep abreast of the continually evolving risk landscape with the emergence of new risks, including:

  • The growth in the numbers of both electric and hybrid vehicles
  • SMART (Small Area Repair Techniques) for accident damage
  • In-vehicle computer technology

Managing the risks – some practical advice

The first place to start is by looking after the people working in the industry and the most common causes of non-fatal injury as recorded by the Health & Safety Executive are:

  • 33% – Lifting and handling [4]
  • 21% – Slips, trips and falls [4]
  • 16% – Struck by object [4]

Following some simple steps can help reduce the risk of injury, financial loss and business interruption.

1) Identify the risks in the premises and who could be harmed or what could be damaged.

2) Assess the risks and record the findings for each peril, including:

  • Causes of fire such as careless handling of fuel, other flammable liquids and gas hazards. Store these appropriately and use proprietary fuel retrievers and adaptors when draining tanks.
  • Theft –it goes without saying that vehicles, vehicle parts, tools and equipment are attractive to thieves. Vehicles in the open are also at risk of catalytic converter theft – a part containing platinum, rhodium and palladium that only takes minutes to remove. Consider a layered approach to security starting at the site boundary, then the building. Key security is also important.
  • Vehicle road risks – are staff appropriately trained to move vehicles? Are driving licences checked?
  • Extended perils – floods, storms and the impact of activities in the local environment e.g. contamination of water sources by oil or fuel spillage.

 3) Take appropriate action, this might include:

  • Staff training and improved housekeeping regimes to clear spillages.
  • Improving physical or electronic site security.

 4) Review risks periodically and consider how they’ve evolved.

  • For example, the introduction of charging points for electric or plug-in hybrid electric vehicles might change the risk.
  • Similarly, the increase in the price of diagnostic equipment will increase the risk value.

Last but not least review your insurance needs against these changes and make sure there’s a suitable business continuity plan in place.

NIG are dedicated to making businesses more resilient. We offer business continuity planning software and a suite of useful documents to support your clients when it comes to reducing risk exposure.


[2] Fire Protection Association – Non Residential Miscellaneous Vehicle Repair report[3] Fire Protection Association – Retail risk review report

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