What Types of Insurance Do I Need for My Tow Truck Business?

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If you are a tow truck owner-operator, then you already know the kind of risks your business is exposed to while assisting roadside heavy-duty trucks or vehicles, especially in extreme weather conditions. Tow truck insurance saves the day in these situations by providing coverage for the numerous business hazards that towing firms deal with on a daily basis.

In the event of an accident or breakdown, this insurance provides coverages such as property damage, physical harm, and medical expenses. In addition to this, towing firms will require a wide range of insurance coverages to adequately safeguard their operations.

Let’s explore tow truck insurance in greater depth.

What is Tow Truck Coverage?

If the unexpected occurs and one of your vehicles is involved in an accident or runs into some form of misadventure, tow truck insurance will aid in protecting you. Typical tow truck insurance mostly addresses the following areas:

  • Liability Protection: Provides third-party coverage such as physical injury and property damage.
  • Physical Damage Insurance: Covers any damage to your truck’s components.
  • Medical Expenses Insurance: It covers the medical expenses for you and any other passengers in the vehicle.
  • Uninsured Motorist Coverage: In the event that an accident is caused by a driver with insufficient coverage or no coverage at all.

Who requires tow truck insurance?

Tow truck insurance is required for any company or owner-operator that offers assistance like breakdown cover or repair for damaged trucks. If you park disabled automobiles at a facility that you own or rent, you need specialized commercial tow truck coverage to ensure a seamless towing process. Tow truck insurance is required by the following companies:

  • Roadside Service Suppliers
  • Circling towing
  • Action haulers
  • Truck body shops
  • Stations with full services
  • Automobile maintenance

Types of Tow Truck Insurance Coverages

Currently, these coverage categories apply to several varieties of standard truck insurance plans.  The following are some extra coverages you may want to consider for your tow truck business.

Auto Insurance Liability

This is the most fundamental kind of insurance that protects you against liabilities that you triggered. Let’s say the harness rope breaks when you are hauling a car. The automobile sustains some damage after striking the pavement with a loud bang. The car’s driver strikes his brain on the steering wheel, suffering a concussion and a bleeding cut.

Liability insurance enters the picture here: it will provide coverage for both personal harm and property damage. You will be held liable for both the damage done to the vehicle or any additional property you may have struck, in addition to any injuries you may have caused to the car owner or any bystanders.

Medical Payments Insurance

This insurance plan will pay for any medical expenses you may incur as a result of an accident you caused. This insurance coverage will protect you in the event that the owner or any bystanders were hurt while towing the broken-down vehicle. Compared to the physical harm coverage offered by auto liability insurance, medical payments insurance provides a wider range of medical coverage.

Physical Damage Insurance

The two insurance plans mentioned above cover any harm done to the car’s owner or bystanders. Let’s now discuss protecting your business. Your tow truck is protected by physical damage insurance in the event of a collision. Let’s say you are late at night pulling an automobile. The crossroads are approaching, and the road is entirely black.

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The tow truck, the automobile, and the person inside are all damaged when you are suddenly slammed by another vehicle. It’s a disaster, and everything you can think about right now is how much money you will have to pay for property damage and personal harm. You can cover every location with one of these three insurance products.

Underinsured/ Uninsured Motorist

Your tow trucks are also covered by this insurance policy. According to the policy’s name, it offers coverage in the event that an uninsured or underinsured motorist strikes your tow truck.

Workers’ Compensation

Employers’ liability insurance safeguards your staff. Workers’ compensation will pay for any medical expenses incurred by one of your workers or drivers if they are wounded in the workplace or get ill as a result of their employment. Even if they are unable to work, it may compensate for some of their missed income, and it may offer life insurance to the employee’s family if they pass away while on the job. 

Because towing may be a risky activity, you should have a plan in place to assist your staff should they become injured on the job. One wounded worker is all it takes to destroy the foundation you have spent so much effort to construct. 

Even though it is not required by State law, we advise getting worker’s compensation. Even though the law doesn’t oblige you to hold it until you’ve reached the minimum number of workers for that State, your business will be and remains liable for covering the worker’s injuries.

Excess Liability

In addition to a primary insurance policy, excess liability insurance offers additional coverage. For example, you can get additional excess liability insurance on top of your liability insurance coverage. The excess liability would take over and continue where your truck liability insurance left out if you were to reach the maximum coverage on your policy.

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When you file a claim, owning excess liability coverage may give you some additional protection. Although it is not required, we are unable to provide it after a claim has been made. Extra liability offers a greater sense of security for only a little annual fee.

Garage Keepers

As previously indicated, your truck business may hold customers’ automobiles on your property while they are being fixed. Your business now has more obligations as a result. In the event that anything were to occur to a customer’s automobile while it was in your shop, you would be protected thanks to insurance known as garage keepers coverage.


Additionally, if you carry automobiles for a living, you should consider purchasing on-hook towing insurance to cover your client’s vehicle while it is being carried. These are advised to safeguard your business from any mishap that can involve one of your clients’ automobiles.

The Key Takeaway

For every type of truck that transports other automobiles, tow truck coverage is a must-have. You will be needing an on-hook tow truck protection play whether you drive a flatbed, a state route tow truck, a mechanic’s truck, or even a vehicle transporter. 

Conventional commercial truck insurance is not sufficient; you must also have coverage for the vehicles you are towing. Keep in mind that the right tow truck insurance may protect your towing business from a number of costly errors. 

Talk with a commercial insurance expert who can advise you on what coverage you need and don’t need if you want to be sure you’re receiving the proper sort and amount. They will ensure you have sufficient coverage to safeguard both you and your company.

I hope you found this blog informative! If you have any doubts in your mind, feel free to share them with us in the comment section below. We will be happy to help you!

Dylan Miller

I am a Chicago native and regular contributor to "Locar Deals". I have a master's degree in English, am an automobile content creation specialist, and have written professionally for a variety of automotive companies over the past few years. I write on a variety of vehicles, from high-end luxury cars to ten-year-old gas guzzlers and everything in between. And I love sharing valuable car buying tips with consumers from all walks of life.

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