Liabilities

According to The Office of Fair Trading (OFT) by far the greatest number of consumer complaints relate to second hand cars – over 68,000 in 2008 – What happens when things do "go wrong"? A motor trader may be completely innocent of the charge laid against him or his business, but a disgruntled customer can still take him to court. With the growth of 'Claim Culture' It is more imperative than ever for the motor trade to protect it's interests. The "burden of proof" lays heavily on the customer bringing the complaint, but the legal defence costs for the trader can be huge, even if the case is not proven.

Public Liability insurance whilst not compulsory for motor traders, is a necessity given the modest expenditure weighed against a potential claim in the event of one of your customers having an accident on your premises. Let's not forget that by law a motor trader owes a duty of care to their customers – his liability or obligation to them to provide a safe environment. Ask any mechanic, and they will agree that a garage can be a dangerous place! Without public liability insurance, the trader and his business could suffer in the event of a customer having an accident.

A duty of care also extends to any work undertaken by a motor trader for a customer. For example, if he fits a new tyre and that tyre fails and causes damage or injury to the customer or another third party, the trader could be liable. As with all UK law, the defendant is innocent until proven guilty. Therefore the customer must prove that the motor trader was negligent. However the motor trader's legal defence could still be enormous. Servicing and Defective Workmanship liability insurance, which is normally included in a Public Liability policy, would cover the motor trader's defence costs and any damages or costs awarded if the case is proven. Liability insurance does not cover the cost of any fines imposed in the case (for breaches in health and safety for example).

Product Liability insurance is another benefit of a Liability policy. When a mechanic fits a faulty part to a vehicle which is proved to have caused damage or injury to a third party, he or his business could be liable. Irrespective of the fact that he didn't manufacture the part that failed. Product Liability covers this eventuality.

Employer's Liability insurance is a compulsory legal requirement for all employers to cover all employees including part time staff. The policy is in place to protect employees interests in the event of death, injury or disease arising out of and in the course of their employment.