Tow truck insurance can get overwhelming very quickly. There are a lot of vocabulary words that can all run together. And there are a lot of coverages available for towing and wrecker businesses, too. One type of insurance that you need to know about is auto liability. It might sound scary, but don’t worry: we’re going to explain how auto liability works, how it protects your towing business, and what affects the cost.
So, let’s get started – this is auto liability insurance made easy.
What is auto liability insurance?
Auto liability insurance covers the cost that your business is legally obligated to pay to someone if you cause them bodily injury or property damage (or both.) For instance, if you’re driving a tow truck and you accidentally cause a wreck, your auto liability can help you cover the costs you owe to the other driver. It can even help you cover legal fees if the other driver decides to sue (more on that in a moment.)
Here’s the general idea:
Bodily injury liability: If you’re at-fault in an accident, bodily injury liability helps cover the costs of the other driver’s medical bills and lost wages. It can even cover pain and suffering expenses.
Property damage liability: Property damage liability helps cover the costs of repairing or replacing the other driver’s car if you damage it in an accident. It can also cover you if you damage other property – like if you take out someone’s fence with your truck on accident.
Why your tow truck business needs auto liability insurance
Here’s the deal:
Bodily injury litigation (legal proceedings) has been getting more and more expensive. The cost of claims has gone right up with it. That’s one reason that it’s so important for your business to carry enough liability insurance. The massive expenses of a lawsuit – not to mention the costs of the other driver’s medical bills and replacing the car – are enough to put a small business in jeopardy. What if you get sued for over a million dollars? You’d want to have some serious insurance in your corner to back you up.
How much auto liability coverage should you get for your business?
Well, first of all, you have to consider both your state’s laws and your contracts. Does your state require you to carry a certain amount of auto liability to operate your business? Do your contracts specify that you need a particular amount of liability insurance? It’s important to consider these requirements and ensure you’re following the law.
However, keep in mind that the state minimum truly is a minimum. You will most likely want to go above the minimum to make sure that you’re adequately covered against lawsuits. If someone sues your business for more than you’re insured, you’re on the hook for covering the rest.
Pro tip: For additional protection against liability, you can get a commercial umbrella policy.
Why it’s important to commit to safety:
Tow truck businesses face a lot of risks, but there are ways that you can reduce the risks that you and your drivers face every day.
This is something to think about:
The safer your business is, the less likely you are to experience accidents. And that means you’ll minimize the number of claims you file. In turn, that can help you save money on your tow truck insurance.
Here are some ways that you can improve safety at your tow truck business:
- Hire the best drivers
- Create workplace policies about safety
- Take a stand against distracted driving
- Have a pre-trip vehicle inspection protocol for your business
- Have weekly safety meetings
- Have continuing driver training and education
How much does auto liability insurance cost?
Every business is different, and every business faces a different amount of risk. Therefore, each one will pay a different amount for their insurance. Insurance companies look at several details about your business before deciding whether or not to cover you and how much to charge you.
They’ll look at details like…
Your drivers: The age and experience of your drivers can affect the cost of your insurance.
Claims: As we mentioned before, your insurance rates may go up if you have filed a lot of claims.
The truck itself: The year, make, and model of your tow truck or wrecker can impact your rates.
Your location/tow radius: Your location and where you operate will factor into your rates.
How long you’ve been in business: Established businesses that have been around for a while may get lower rates than a new venture.
The best way to get an accurate idea of how much your auto liability insurance will cost is to get tow truck insurance quotes. Our agents would be happy to help you shop around so you can get the best coverage at the best rate. Our agents are tow truck insurance experts, so we’ll make sure your business has enough insurance to protect you from the risks you face. All you have to do to get quotes is fill out our form or give us a call today.