As a tow truck owner, you face many of the same concerns as owners of other commercial vehicles, as well as some unique risks.
Insurance companies that understand these risks, can provide a well-rounded insurance package that includes several different coverage options.
With these options, you can build a policy to meet your individual needs.
Commercial tow truck owners and operators are required by law to carry liability insurance. Because you are also responsible for the well-being of your drivers, customers, and the vehicles that you are towing, you’ll need several additional types of coverage on board. As part of our Commercial Tow Truck 101 Insurance Guide, we’ll review some of these coverages, so you’ll have a better understanding of what it takes to insure your operation.
Property: Property coverage protects you from loss to your assets such as a building that you may own or the property inside. Coverage could extend to tools and equipment on a scheduled premise however, each policies terms and conditions differ so it is important to review your policy for specifics.
General Liability: This is a type of insurance policy that provides coverage to a business for bodily injury, personal injury, and property damage caused by the business's operations, products, or injuries that occur on the business's premises.
Garage Liability Insurance: Accidents happen everywhere; on site, off site, with employees, and with customers no matter how much you’ve planned. General liability covers injuries suffered at your shop/garage and damages that you cause to other people and their property. Most garage liability policies also include coverage for liabilities arising from the shop’s general business operations, such as discrimination lawsuits from employees.
Tow Truck Auto Liability: This coverage protects you from being held liable for property damage and bodily injuries caused by your tow truck.
Physical Damage Insurance: This is coverage helps when your truck is damaged, regardless of fault. This type of insurance is usually required by lenders if you have financed the purchase of your truck.
Garage Keepers Insurance: Towing businesses and service stations might need to carry this type of insurance to protect their customer’s vehicles while they’re being held or worked on. Some policies extend on-hook coverage from the garage keepers coverage. As each policy's terms and conditions differ, it is important to review your policy to understand how coverage applies.
On-Hook Insurance: This type of coverage will help pay for damages to vehicles you are towing. Some policies limit on-hook coverage to vehicles while others limit coverage to motorized pieces of equipment. It is important to review your policy to determine if the on-hook coverage provided in your policy extends coverage to all items being towed. As each policy's terms and conditions differ, it is important to review your policy to understand how coverage applies.
Cargo: For an additional premium, business owners may choose to purchase cargo coverage. This insurance coverage pays for coverage to lost, stolen or damaged property and contents in the care, custody and control of the tow truck driver. Cargo coverage can also be extended to provide coverage to non-motorized pieces of equipment being towed. Keep in mind, each policy's terms and conditions differ so not all cargo policies are the same.
Workers’ Compensation Insurance: Workers’ Compensation insurance is the law if you have employees. It helps cover the medical costs and a portion of lost wages for an employee who becomes ill or injured during work.
Umbrella: In the litigious society that we live in, liability claims can quickly turn into lawsuits, especially if someone is badly injured. If you feel that the available liability limits are not enough to protect from potentially devastating legal costs, you may want to consider purchasing an umbrella liability policy to increase your liability coverage to $1 million or more.
Not all tow truck companies or operations are the same, and what may be necessary for one may not be necessary for the other. This remains true where tow truck insurance is concerned. Fortunately, there are several tow truck insurance coverages that allow you to customize your policy to fit your business needs.
At ASZ we can help you find that perfect combination of coverage and rates to protect your towing operation from costly claims. So whether you repossess cars for financial institutions, transport vehicles from accidents scenes, help stranded drivers with inoperable vehicles, own a single truck and driver operation, or something bigger, you’ll be covered no matter where the road takes you.
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