The history of motor trade insurance can be dated back to the emergence of the industrial era when England was the hub of early auto innovation. During this period, there was a lot of innovations in the automobile sector with Duryea brothers being the first Americans to start an automobile company in theUnited States. It was around this time when the nameGilbert J. Loomis began to be heard in the public arena. 

Loomis was a mechanic and also a pioneer in building automobiles with his operations based in Westfield, Massachusetts. Little is known about the background and education of this pioneer but most of his works have been documented. His well-known scientific breakthrough includes the building of a steam car in 1896 which he did not commercialize for reasons which are not yet clear. However, in 1901, Loomis started a car manufacturing firm. These cars were powered by gasoline and they had 5 hp Crest air-cooled engines. This company also produced automobile parts which were sold to other private vendors.

In 1897, Loomis insured his personal car which he had built with the Travelers Company which was issuing insurance policies at that time. The cost of the policy bought was $7.50. In this policy, which was issued in Dayton, Ohio, Loomis was to be protected from all damages which his car could have caused.  He was also insured against the injuries or death which could have happened while riding the car. The terms of the issuance of this insurance were based on the policies guiding the horses and horse-drawn carts coverage which was issued by the traveler's company. Therefore, Loomis became the first person to perceive and purchase a prototype of a car as well as the motor traders’ insurance policy as we see them today.

From this humble genesis, the car insurance sector advanced into a more dynamic area with many other insurance policies sprouting within the motor industry ecosystem. One of such policies which became highly common after the car insurance went public in 1902 was the motor trade insurance. This insurance cover focuses on protecting parties which deal with vehicles in the public sector. Such parties include the motor mechanics, vehicle merchants, and body parts dealers.

 This traders insurance is offered into two broad forms: the road risk and the combined cover. The road risk cover is necessary when a business has frequent movement of vehicles in and out of the business premises. This can occur when buying or selling a vehicle or transporting a customer vehicle to a business for maintenance purposes. This insurance cover is mandatory for all businesses handling and moving vehicles which do not belong to them.

A combined policy cover is a motor trader insurance which includes the protection of working premises but not the area of residence. With such a cover, a business is protected from any risk which might take place in the working premises. If operating from rented premises, it is important to inquire with the landlord to know whether he/she insured the building(s).