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When starting a towing business, owners have a lot to think about. You have to obtain a business license, register with the Department of Transportation, inspect your tow trucks, and become properly insured. Your towing business may also specialize in a specific task or perform multiple: 

Emergency towing – This service requires a tow truck driver to tow a vehicle that has been damaged. In most cases, the vehicle is on the side of the road or highway and is not in drivable condition. Depending on the type of tow truck, the vehicle could be a small sedan or as large as a charter bus.

Recovery towing – Sometimes tow truck drivers will find themselves being called to an accident of different circumstances. Let’s say a vehicle has veered off the side of a road and crashed into a ditch or a body of water. Tow truck drivers are needed to recover the vehicle from a difficult or hazardous area. This usually requires a tow truck driver who has specialized skills and experience.

Roadside assistance – This usually involves engine jumpstarts or replacing flat tires. It can also involve instances where a vehicle has run out of fuel. A tow truck driver can assist with these services along with towing a vehicle to another location. 

With these different services come different insurance policies. Tow truck company owners have to be educated on what type of insurance plans they’ll need to protect their business.

What Kind of Insurance Do Tow Trucks Need?


If your business includes towing as a service you will need tow truck insurance to protect it. This includes repair shops that offer towing services or tow truck companies that primarily take a vehicle to a customer’s desired location. Here are the types of insurance tow truck companies should consider:

Auto liabilityTow truck drivers with auto liability insurance can rest assured that in the event of an accident, their insurance will cover the costs to replace or repair the other vehicles involved. Oftentimes, auto liability insurance includes provisions for bodily injury. This will cover the medical fees of other drivers. It may also cover any legal expenses.

On-hook/in-tow insurance – This coverage offers protection to a client’s car while it is in the process of being towed.

Garage keepers insurance – This protects a client’s car while it is being repaired and on your property. Repair shops should consider this insurance coverage option.

Excess liability – Consider getting this insurance coverage if you are looking for extra insurance coverage in addition to an underlying policy. If you are ever in a situation where you exhaust the limit of your coverage, excess liability would go into effect.

Uninsured motorist insurance – This insurance coverage will pay for injuries to your driver if they are injured in an accident caused by another driver that does not have insurance or adequate coverage. It will also protect tow truck companies that are involved in a hit-and-run caused by another driver.

Physical damage insurance – It will pay for the repairs for your tow truck if it is involved in a collision with another vehicle.

Workers’ compensation insurance This protects tow truck company employees and their employers. It provides compensation for medical fees and lost wages if someone is injured or becomes sick on the job.


What Risks Do Tow Truck Companies Face?


When owning a tow truck company it’s paramount that you understand all of the risks involved. You’ll need to understand what services you provide, what type of insurance you’ll need, and what risks your drivers or business may face.

Accidents – Being part of an accident is a risk for any business that requires a lot of time spent on the road. Depending on who causes the accident, tow truck companies could be held responsible for repairs, medical fees, and legal fees.

Stolen or damaged vehicles – If a tow truck is stolen or damaged it could mean unexpected and costly fees for a tow truck company. 

Client vehicle damage – If a client’s vehicle is damaged while being towed or while being in possession of a tow truck company, the company could be held responsible. This also applies to client vehicles that are awaiting repairs in an automobile repair shop.

Wrong vehicle repossession – There is a chance that a vehicle could be incorrectly repossessed due to factors such as receiving outdated information, failing to read the license plate or VIN, etc. This type of mistake would be the tow truck company’s fault and could result in fees.


Our Team Understands What You Need

We’ll help you get on the right track with tow truck insurance. Our team will guide you toward which policies will benefit your business the most and offer you the most protection. We also offer risk management services. Combined, these factors will ensure your business is protected but also that your employees are protected as well. Contact us today to get in touch with one of our experienced agents.

Contact Us Today!

Fill out the contact form below or call 561.571.1001 to speak to a member of our team.
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