Tow Truck Insurance: Protecting Your Business

Tow truck operators provide essential services such as roadside assistance, vehicle towing, and recovery. From navigating difficult roads to dealing with irate vehicle owners, tow truck drivers are exposed to specific risks on a regular basis. Given the nature of their operations, tow truck drivers require tailored insurance coverage that meets their unique needs. This is where tow truck insurance comes in.

Why Do Tow Truck Drivers Need Insurance?

Towing businesses need insurance for several important reasons, primarily to protect their financial interests, comply with legal requirements, and mitigate the common risks associated with their industry.

Here are several reasons why towing businesses require coverage:

Liability Protection: Towing operations involve the movement of vehicles, and accidents can happen. Liability insurance provides coverage for bodily injury or property damage that the towing company may be legally responsible for. This covers damages for bodily injuries to third parties or damage to other vehicles during towing.
Legal Compliance: Towing businesses are typically required by law to carry certain types and amounts of business insurance. Compliance with these regulations is essential to avoid fines, penalties, and potential suspension of business operations.
Property Protection: Towing vehicles are valuable assets. Insurance helps protect the towing company's investment in case of an accident, theft, vandalism, or other covered perils.
Customer Vehicles: Towing businesses often tow customer vehicles, and a towed vehicle may be damaged during the towing process. Garage keepers insurance provides coverage for damage to customer vehicles while they are in the custody of the towing company.
Employee Injuries: Workers' compensation insurance is important for covering medical expenses and lost wages if an employee gets into an accident and sustains bodily injuries on the job. This coverage is often required by law and helps protect both the employees and the business.
Roadside Assistance Liability: Liability insurance can cover the costs associated with providing assistance, including situations where the customer alleges negligence.
Storage Liability: Towing companies often provide storage services for impounded or disabled vehicles. Storage liability insurance helps protect the business in case of damage or theft of vehicles while in storage.
Business Interruption: In the event of a covered loss that leads to a temporary shutdown of the business, business interruption insurance can provide coverage for lost income and certain ongoing expenses, helping the business stay afloat during a challenging period.
Legal Defense Costs: If the towing company faces lawsuits or legal claims, insurance can help pay for the costs of legal defense. This is crucial for protecting the business's financial resources in the face of legal challenges.

What type of Insurance Coverage Do Tow Truck Companies Need?

Tow truck businesses often deal with several risks when providing towing services and may be held liable for medical bills and other settlements. Having multiple tow truck insurance coverages can help them address third party claims without it causing undue financial strain.

Liability Insurance

Physical Damage Insurance

Other Types of Tow Truck Driver Insurance

Uninsured/Underinsured Motorist Coverage typically covers bodily injury or property damage caused by a motorist who either has no insurance or insufficient coverage. This protects the tow truck operator in case of accidents involving uninsured or underinsured drivers.
Roadside Assistance Coverage helps address the costs associated with providing roadside assistance services, such as jump-starts, tire changes, and lockout services.
Hired and Non-Owned Auto Insurance extends liability coverage to vehicles that the towing business may rent, lease, or use but does not own. It also covers non-owned vehicles used for business purposes.

Types of Commercial Tow Truck Insurance Coverages

Tow Trucks General Liability Insurance

Protects against damage to a customer’s vehicle while they are in the custody of the towing business. This coverage is essential for towing companies that store or impound vehicles.

Medical Payments Insurance

Medical payments insurance provides coverage for medical bills incurred by the driver and passengers in the tow truck in the event of an accident, regardless of fault.

Garage keepers Legal Liability Insurance

Garage keepers legal liability (GKLL) Insurance is a specific type of insurance coverage designed for businesses that take custody of customers’ vehicles, such as tow truck operators and auto repair shops. In the context of tow truck insurance, GKLL provides financial protection when there is damage to the customer’s vehicle while it is in the care, custody, and control of the tow truck business.

On-Hook Towing Insurance

On-hook towing insurance provides physical damage coverage in case a customer’s vehicle is damaged while being towed. On-hook coverage is crucial in case of accidents or incidents during the towing process.

Towing Operations and Storage Protection

This is a specific type of coverage that addresses the unique risks associated with towing businesses, especially those that provide storage services for impounded or disabled vehicles. This coverage is designed to protect tow truck operators and towing businesses from liabilities related to towing operations and the storage of vehicles.

Additional Coverages for Towing and Storage Businesses

In addition to tow truck insurance, you may get in touch with an insurance agent for additional coverage. These policies may include:

General Liability Insurance

General liability insurance covers property damage, bodily injury, and other liabilities related to towing operations.

Non-Trucking Liability Insurance

This type of commercial trucking insurance provides coverage for tow trucks that are not engaged in company-related activities and fills gaps in coverage.

Rental Reimbursement

If tow truck drivers have to pay for a substitute vehicle while their primary vehicle is being repaired following a covered accident, rental reimbursement can help keep operations running.

Umbrella/Excess Coverage

This provides additional protection beyond the coverage limits of your primary insurance policies and supplements them with higher limits.

Get the Right Insurance Coverage For Your Tow Trucks

Get comprehensive coverage for your tow truck business when you contact our TRS-certified insurance agent. We will help you determine sufficient coverage limits for your needs. Get exceptional service and pay competitive rates for a well-rounded commercial insurance coverage policy.