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Commercial insurance coverage for tow trucks

Protecting Your Tow Truck Business: Insurance Coverage Explained

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Thursday, June 1, 2023
Towing Insurance

As the owner of a tow truck business, it is essential to ensure the protection of yourself, your employees, and your assets against potential risks and liabilities. Accidents are unpredictable, and having appropriate insurance coverage is vital to safeguard your business and provide you with peace of mind. In this article, we will discuss the different types of insurance coverage that are crucial for your tow truck business. This information will help you make informed decisions to safeguard your investment.

Starting a tow truck business involves several risks, such as damage to vehicles, bodily injuries, property damage, and legal liabilities. Insurance acts as a safety net, providing financial protection in case of accidents or unforeseen events. It not only protects your business but also assures your clients that you are a responsible and trustworthy service provider.

What type of tow truck insurance coverage do business owners need?

It protects you from claims and lawsuits arising from property damage or bodily injuries caused by your operations. Here are three essential types of liability insurance for tow truck businesses:


  • General Liability Insurance – General liability insurance covers third-party claims for bodily injuries, property damage, and personal injuries. For example, if a customer slips and falls while waiting for their vehicle to be towed, this insurance would cover their medical expenses and any resulting legal expenses.
  •  Garagekeepers Liability InsuranceGaragekeepers liability insurance is specifically designed for businesses that store customers’ vehicles. If a vehicle is damaged or stolen while in your custody, this coverage protects you from potential lawsuits and claims.
  •  On-Hook CoverageOn-hook coverage insures the vehicles you are towing. It covers damages to the towed vehicle while it is under your care, custody, and control. This is especially important as accidents can occur during the towing process, and you don’t want to be held liable for any damages.

Property Insurance

Protecting your physical assets, such as your tow trucks and office space, is essential to ensure the continuity of your business operations. Consider the following property insurance coverages:


  • Commercial Property Insurance – Commercial property insurance protects your physical assets, including your office building, garage, and equipment, against risks such as fire, theft, vandalism, and natural disasters. It provides coverage for the repair or replacement of damaged property, helping you quickly recover from unexpected events.
  • Business Interruption Insurance – In the event of a covered loss, business interruption insurance provides compensation for lost income and ongoing expenses during the downtime. This coverage ensures that your tow truck business can continue to operate smoothly even if you’re unable to provide services temporarily.

Auto Insurance

As a tow truck business owner, your vehicles are at the core of your operations. Proper auto insurance coverage is crucial to protect your tow trucks and drivers on the road. Consider the following types of auto insurance:

  • Commercial Auto Liability Insurance – Commercial auto liability insurance provides coverage for bodily injuries and property damage caused by your tow trucks while in operation. It ensures that you can financially compensate others if you are at fault in an accident.
  • Physical Damage Coverage – Physical damage coverage protects your tow trucks against damage resulting from accidents, theft, vandalism, or other covered perils. It covers the cost of repairs or replacement, allowing you to quickly get your vehicles back on the road.
  • Uninsured/Underinsured Motorist Coverage – Uninsured/underinsured motorist coverage protects you and your drivers if you are involved in an accident with someone who doesn’t have insurance or has inadequate coverage. It ensures that you can still receive compensation for damages even if the at-fault party is unable to pay.

Workers’ Compensation Insurance

If you have employees working for your tow truck business, workers’ compensation insurance is typically mandatory in most jurisdictions. This coverage provides wage replacement and medical benefits to employees who are injured or become ill on the job. Workers’ compensation insurance protects both your employees and your business from financial hardship resulting from workplace accidents.


Umbrella Insurance

Umbrella insurance provides an additional layer of liability coverage above and beyond the limits of your other insurance policies. It offers broader protection and higher policy limits, ensuring that you are well-covered in case of catastrophic events or large liability claims. Consider umbrella insurance as an extra safety net to further protect your tow truck business. With our insurance carriers we work with we can get you up to a $10 Million of Umbrella insurance coverage.


As a tow truck business owner, having the right insurance coverage is crucial for protecting your business, employees, and clients. The types of insurance coverage you need include liability insurance, property insurance, auto insurance, workers’ compensation insurance, and umbrella insurance. By investing in comprehensive insurance coverage, you can operate your business with confidence, knowing that you are prepared for any unforeseen events or accidents.


Common Questions:

Why do tow truck businesses need liability insurance?

Liability insurance protects tow truck businesses from potential claims and lawsuits arising from property damage or bodily injuries caused by their operations. It provides financial protection and helps cover legal expenses.


What is garagekeepers liability insurance?

Garagekeepers liability insurance is designed for businesses that store customers’ vehicles. It covers damages or theft of the vehicles while in the business’s custody, protecting them from potential lawsuits and claims.

Can I use my personal auto insurance for my tow truck?

Personal auto insurance typically does not cover commercial activities like towing. It’s important to have commercial auto insurance specifically tailored to cover your tow trucks and the unique risks associated with your business.

How much does insurance for a tow truck business cost?

The cost of insurance for a tow truck business depends on various factors such as the size of your fleet, the number of employees, your location, coverage limits, and your claims history. Reach out to us today to get a Tow Truck Insurance quote.

Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.