Finding the right insurance coverage for your towing company can be challenging. In this article, we’ll review the basics of tow truck insurance and explain some specialized coverages you may want to consider.
Commercial general liability insurance
A commercial general liability policy offers your company financial protection when you are blamed for bodily injury to non-employees. For example, if a person comes to collect their vehicle and is injured on your premises, your insurance would help pay for their medical expenses and other related costs. It can also help if your employee is found liable for injuries to someone during a vehicle repossession or an on-location hookup.
Whether you’re a sole proprietor or own a fleet of trucks, you’ll need this insurance and other coverages not only to protect your business but also to provide proof of insurance to auto body shops, governmental agencies, and other potential customers.
With settlement values and jury verdicts rising, it’s important that you explore excess liability insurance. This policy will respond when costs of a claim exceed the coverage limits of your primary liability policies, such as general liability or commercial auto liability.
To run a successful business, you’ll need to advertise. Your competitors may allege you infringed on their trade dress – that is to say, the “look” of their website or their branded vehicles. These claims are covered under a general liability policy.
If you detain a person who interferes with your holding of a vehicle, that person might claim false arrest. These types of incidents can generate expensive claims. Your liability coverage can be written to offer protection against these and other allegations.
Business auto coverage can include garage coverage
You have a lot of money tied up in towing equipment. Commercial auto coverage can protect your vehicles against typical losses, such as fire, theft, collision, and other perils associated with physical damage to your tow trucks.
When you’re towing or in possession of a person’s vehicle, damage or theft can occur. Any state in which you operate will require you to have auto liability coverage. Business auto coverage can help with your liabilities if you damage a customer’s vehicle in transit or during the hookup process.
Some states may require garagekeepers liability coverage, which can protect you should damage occur to a vehicle while it’s in your possession.
Medical payments coverage is an important addition to your commercial auto policy. It covers medical costs for occupants of your vehicle who are injured in a crash.
If you’re involved in repossessions, you may want to explore coverage for wrongful repossession. If you inadvertently seize the wrong auto, you’ll face an angry vehicle owner. Repossession coverage can help with costs associated with this type of error.
Do you need the MCS-90 endorsement to demonstrate compliance with interstate motor carrier regulations? Your JAISIN insurance advisor can help find insurers that provide this important addition to your policy.
On-hook versus flatbed towing coverage
Some insurers categorize tow trucks as either hook and chain or flatbed, and different coverage may apply. If your drivers load vehicles onto a flatbed, the insurer may require you to purchase cargo coverage, in which case you’ll need motor truck cargo insurance.
Insurers who specialize in tow truck insurance understand the coverage you need to help you operate with confidence. That is why it’s important to work with a JAISIN commercial auto insurance professional versed in your specific type of towing business.
Own or lease? Commercial property insurance protects you
Whether you own or lease, your property faces a variety of risks, from weather to theft.
Commercial property insurance covers your buildings, business equipment and supplies, and it can provide lost-income protection if a covered event hurts your stream of income or forces your relocation.
If you need flood or earthquake insurance, your JAISIN advisor can either add these risks to your property policy (by a process called “endorsement”) or help you choose a stand-alone policy for these perils.
You may also want to protect your business assets with coverage for employee theft from your company. That includes direct stealing from the till as well as fraud.
Workers’ compensation insurance
Workers’ compensation insurance is necessary if you have employees and is mandatory in most states. It includes coverage for the cost of medical treatment and an employee’s lost wages after a work-related injury or illness.
Cyber liability can help protect your business
Today’s cyber hackers increasingly target small businesses. Your tow company may be an attractive target because many companies use mobile devices to send drivers on calls and to receive payment. You also may have increased risk if you use wire transfers, which are a hotbed of cyber theft.
Cyber insurance is a specialty coverage. Your JAISIN insurance professional can help you choose a strong cyber policy that also provides assistance with preventing and recovering from a digital disaster.
Further insurance suggestions
Every towing business with employees should consider employment practices liability insurance (EPLI). If an employee alleges harassment or other wrongful treatment by your company, the EPLI policy will help pay for investigative costs, legal fees, and settlements or court judgments.
If you are a family or closely held organization, consider key-person life insurance, which provides financial assistance in the event of the sudden death of a partner or an owner.
If your company offers health benefits or a retirement plan, insurance covering financial problems caused by your in-house benefits administrators’ errors or neglect is available. One missed filing or lost document could result in serious monetary losses for an employee participant, who could in turn sue you for those damages.
A lot of things can happen in the tow truck world. From dispatch to a safe tow to your facility, choosing the right coverage can provide security for the long haul. JAISIN Insurance & Risk Advisors can help you find the right coverage for your tow company at the right price.
This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem.
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