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Insurance for Your Towing Business

Towing A Car
The towing sector continues to perform well in spite of a few industry-related challenges. Insurance is among the challenges businesses are facing today. Towing presents many risks not only to your trucks but also to workers and the vehicles you tow, and these risks can easily sink your business.

Comprehensive insurance from a reputable provider can help you avoid the impact of such liabilities to your business.

A lot goes into selecting the right coverage for your new tow trucking business. Here is a rundown of everything you need to know to make the right decision.

Commercial Tow Truck Coverage

Commercial tow truck insurance covers all the tow trucks you own, those that you rent or lease, and those your employees own but use for business. The type of coverage in your policy will depend on your business needs.

Generally, the types of coverage in commercial tow truck policies include:
  • Liability Insurance: All tow truck businesses must carry liability insurance to cover for the cost of bodily injury or property damage that your vehicles cause to others and their property
  • Comprehensive Insurance: This coverage helps to repair or replace your tow truck in the event of a fire, theft, or a natural disaster
  • Collision Insurance: This covers the cost of repairing or replacing your tow truck following an accident
  • Uninsured or Underinsured Coverage: This helps to cover the cost of repairing your vehicle and medical expenses in the event you are involved in an accident caused by a driver who lacks insurance or has inadequate insurance
  • Medical Insurance: This covers the cost of medical expenses for the driver and other passengers who were in the tow truck at the time of the accident
Towed Property Coverage 

You also need to purchase coverage for the vehicles you will be towing. The two most common types of towed property coverage are on-hook towing and garagekeepers liability insurance.

On-Hook Towing Insurance

On-hook towing insurance covers the cost of repairing or replacing a client's vehicle in the event that a collision, explosion, fire, vandalism, or theft damage the vehicle while you are towing.

Many insurance providers require you to purchase liability insurance to qualify for on-hook towing insurance. Additionally, if you have a fleet of tow trucks, all of them must have on-hook insurance and all must have the same coverage limits.

Garagekeepers Legal Liability Insurance

Garagekeepers legal liability insurance covers the cost of repairs if a collision, fire, theft, or vandalism damage a client's vehicle stored on your business premises. This insurance is optional and is only suitable if you store towed vehicles in a parking area or storage unit for additional auto services.  

Many insurance providers require you to have a separate garagekeepers legal liability policy for each parking location. You also need to buy liability insurance and on-hook towing insurance to be eligible for garagekeepers legal liability coverage.

Commercial Tow Truck Coverage Cost Saving

Insurance will be among the biggest expenses in your new towing business. In the past few years, the cost of tow truck insurance has increased but you can take several steps to manage insurance costs.

Here are a few tips:
  • Hire drivers with a clean driving record
  • Keep your tow trucks well maintained
  • Use GPS to track speeding drivers
  • Nurture and support a culture of safety in your business
  • Resolve safety issues immediately
  • Use your insurance only for major claims
These precautions will help to minimize liability and therefore save on costs.

If you consider the risks involved in the process of towing a vehicle, purchasing adequate insurance is the best decision you can make for your business.

At Alliance Business and Commercial Insurance Services, we are dedicated to helping your business succeed. Call us today for tow truck insurance in Orange County, California.