As a tow truck business owner, you face unique risks—from road accidents to damaged vehicles during towing. The right tow truck insurance is critical to keeping your operations protected, compliant, and profitable.
In this article, Jason McConkey, director of transportation underwriting at Central Insurance, shares six types of essential tow truck insurance coverages your business needs.
Six Crucial Policies For Tow Truck Insurance Coverage
Your tow truck fleet is the heart of your business. A commercial auto policy safeguards your vehicles from accidents, collisions, and liability claims, whether on the road, in your parking lot, or during transport.
This policy covers damages to your tow trucks, medical expenses from accidents involving your vehicles, and legal fees arising from liability claims. Additionally, commercial auto insurance ensures compliance with state and federal regulations for operating commercial vehicles. Without this coverage, a single accident could result in devastating financial losses, leaving your fleet and business vulnerable.
2. Garagekeepers Liability Insurance
When customers entrust their vehicles to your care, they rely on your business to protect them from harm. Garagekeepers liability insurance covers the cost of damages to cars in your possession, whether parked on your lot, stored overnight, or awaiting repair.
Risks like fire, theft, vandalism, or even accidental damage all fall under this coverage. For businesses that store vehicles for extended periods, Garagekeepers demonstrates that you take their property—and your responsibility—seriously.
3. On-Hook Towing Insurance
Towing vehicles is inherently risky, and accidents can happen even when drivers are cautious. On-hook towing insurance protects customer vehicles while being towed. If damage occurs to a towed vehicle during transport—whether from a collision, equipment failure, or unforeseen road hazards—this policy covers the cost of repairs or replacement.
As McConkey puts it, “On-hook towing is indispensable. It ensures you’re covered if something happens to a customer’s car while it’s hooked to your truck.”
Running a towing business involves constant interaction with customers, bystanders, and other companies, which introduces a range of liability risks. General liability insurance protects your business from third-party claims involving bodily injury, property damage, and personal injury. These claims could include someone slipping on your premises, damage caused by equipment during a tow, or even libel or slander against your company. Beyond immediate medical or repair costs, general liability insurance covers legal and settlement expenses.
Towing employees face numerous hazards, from loading vehicles to managing traffic on busy roads. Workers’ Compensation insurance is essential for protecting your staff and business.
This coverage pays for medical expenses, rehabilitation, and lost wages if an employee is injured. It also shields your business from lawsuits related to workplace injuries, providing a vital layer of protection and ensuring compliance with state laws.
6. Business Interruption Insurance
Business interruption can be a significant strain on tow truck companies. Tow truck businesses depend on operational continuity to generate revenue, but unexpected events can bring everything to a halt.
Business interruption insurance helps bridge the gap when disaster strikes. If a storm damages your fleet, a fire hits your office, or someone steals your equipment, this coverage replaces lost income during downtime. It also covers ongoing expenses like rent, payroll, and utility bills, allowing you to focus on recovery rather than financial strain.
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Protecting Your Tow Truck Business With Telematics
In addition to proper tow truck insurance coverage, McConkey stresses the importance of telematics for tow truck companies. Telematics are a technology that combines telecommunications and data to monitor and manage vehicles.
For tow truck companies, telematics provides critical insights like real-time GPS tracking, vehicle diagnostics, and driver behavior analysis. These tools can improve fleet efficiency and help mitigate risks by identifying unsafe driving habits, monitoring vehicle health, and ensuring compliance with regulations.
“Telematics and cameras do more than just document incidents,” McConkey explains. “They create accountability and improve safety. They also help us defend our insureds when they’ve done everything right.”
“Tow truck drivers are often the first responders after an accident,” McConkey says. “They’re there to clear the scene and help people move forward.”
“At Central, we’re proud to partner with businesses making a difference in the community and the lives of those they serve. Central’s transportation team understands the unique challenges tow truck businesses face.”
-Jason McConkey, Central’s Director of Transportation Underwriting
Our expertise positions us to help you find the right coverage to protect your fleet, employees, customers, and reputation. Find an agent to learn more.
The information above is of a general nature and your policy and coverages provided may differ from the examples provided. Please read your policy in its entirety to determine your actual coverage available.
