The towing industry plays a vital role in keeping America’s roads moving. Every day across the country, an average of 55,000 vehicles are towed. This number is only expected to grow as the average age of vehicles in the U.S. climbs to 12.6 years. However, the risks involved in the industry are just as significant.
When you’re in the towing business, you know every job has its challenges. You’re often called out in high-pressure situations, whether it’s clearing wrecks on busy highways, rescuing stranded drivers, or transporting vehicles across unpredictable terrain. Alongside the job’s physical demands, there’s also a hidden risk to your company’s financial health.
That’s why having the right towing insurance is crucial to complying with state regulations and protecting your business. Towing isn’t like any other business. The vehicles you work with, the hazards you face, and the nature of your operations create a risk environment that’s distinct from standard auto repair or transport businesses. The right policies can protect you in cases of:
- Accidents involving your tow truck—given the size and weight of tow trucks, accidents can lead to significant damage and costly claims.
- Damage to customer vehicles—even the most experienced operators can encounter situations where towing or storage damages a customer’s vehicle.
- Employee injuries—your drivers face risks every day, from roadside accidents to lifting-related injuries.
- Legal disputes—a customer unhappy with your services may pursue legal action, costing you time and money.
Jason McConkey, director of transportation underwriting at Central Insurance, explains it best, “The towing industry operates on tight margins and long hours. The last thing a business owner wants is to face a major claim they can’t afford to cover.”
Read on to learn why towing insurance is necessary and how to ensure your policy meets your business’s demands fully.
What Is Towing Insurance?
Towing insurance is a specialized collection of policies designed to meet the unique needs of tow truck companies. It provides financial protection against the risks tow truck operators face daily, such as roadside accidents, damage to vehicles in transit, and injuries to employees or third parties.
At a Glance: Unlike standard commercial auto insurance, towing insurance is tailored to cover industry-specific risks, including:
With towing insurance, you can safeguard your business from the financial fallout of unexpected events, ensuring your operations stay on track and your reputation remains strong.
McConkey breaks down the three reasons why this investment is critical.
1. Accidents Happen, and They Can Be Costly
No matter how careful your drivers are, accidents are inevitable in the towing industry. Your trucks are large and heavy and often operate in challenging conditions—think icy roads, tight urban areas, or nighttime recoveries. Even a minor collision can result in extensive damage and liability costs.
Here’s the financial reality in McConkey’s experience: A single accident involving a tow truck can lead to expenses ranging from $15,000 to over $75,000, depending on the severity of injuries or damage. Without towing insurance, you’d have to cover these costs out of pocket, potentially jeopardizing your operation.
“Tow truck accidents are not uncommon, and the damages can escalate quickly,” McConkey explains. “A well-rounded towing insurance policy protects you from absorbing these costs directly.”
How to Protect Against Costly Claims:
- Commercial auto insurance covers damage to your trucks and liability for accidents involving other vehicles.
- On-hook towing insurance protects customer vehicles during towing in case of damage.
2. Your Reputation Is on the Line
In the towing business, trust is everything. When customers hand over their vehicles to you, they expect you to return them safely. However, accidents, damage during transport, or mishaps while vehicles are stored can lead to unhappy customers and even lawsuits.
For example, imagine towing a classic car to a repair shop. If the vehicle is scratched or damaged during the trip and you’re not adequately insured, you’re responsible for repairing unique, outdated, and often expensive parts. Additionally, you could incur legal fees and a negative reputation after damaging a customer’s prized possession.
“Customers might forgive a minor inconvenience, but maybe not a major loss,” McConkey adds. “Towing insurance ensures you can address these situations professionally, preserving your reputation.”
How to Protect Your Reputation:
- Garagekeepers liability insurance covers damage to customer vehicles stored on your property.
- General liability insurance protects against non-auto-related claims, such as injuries at your facility.
3. Protect Your Employees and Stay Compliant
Your drivers are your most valuable asset, but their job comes with inherent risks. They face potential injuries daily from lifting heavy equipment to operating in hazardous roadside environments.
According to the U.S. Bureau of Labor Statistics, truck drivers have a fatality rate for truck drivers of 26.2 deaths per 100,000 workers. Due to the dangers of the job, promoting a safety culture for your drivers is the best way to keep everyone safe. Investing in Workers’ Compensation insurance safeguards your employees and ensures your business complies with state regulations.
“Insurance isn’t just about protecting the trucks. It’s about the people behind the wheel. You always want to be able to support your employees if something goes wrong,” McConkey notes.
Did You Know? Central offers several discounts and credits for eligible auto policyholders to help you save money on your insurance. You may qualify for discounts for implementing vehicle safety features, payment timeliness, and more.
McConkey also stresses the importance of investing in regular employee training to ensure your drivers have the knowledge and skills needed to navigate the hazards of towing safely. Below, he highlights the key areas of focus:
“Repeating messages is a really valuable way to drive something home,” McConkey explains. “You can’t expect somebody to hear it once and retain it. Make sure you’re repeating safety messages and creating an incentive structure by rewarding those who go long periods without incident.”
How to Protect Your Employees:
Tow Truck Insurance with Central
Running a tow truck company means you’re in the business of solving problems. But to do your job well, you must protect your business from unexpected challenges. That’s where the right towing insurance makes all the difference.
At Central Insurance, we know your industry inside and out because we’ve worked with tow truck businesses like yours for years. “We understand tow operators have unique needs,’ McConkey explains. “You’re not just driving trucks. You’re also responsible for expensive equipment and other people’s property. A one-size-fits-all policy doesn’t work for this industry.” That’s why we offer a collection of policies tailored specifically for tow truck companies, ensuring your coverage works as hard as you do.
Learn More: Tow Truck Insurance: The X Policies You Need for Your Business
When you partner with Central, you’re partnering with a team that understands your unique risks. Whether it’s walking you through a claim or helping you implement loss control measures to reduce hazards, We believe in providing the expertise, tools, and support you need to run your business with confidence.
Let Central Insurance help you stay on the road, no matter what lies ahead. Contact an agent to start building your tow truck insurance policy.
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