If you’re running a tow truck business, you understand that towing isn’t exactly without its risks. There’s a lot that goes into towing, and your business faces potential hazards every day. Though it’s not exactly fun to think about doom and gloom, it’s important to understand some of the risks you face and how you can manage your risks with the right insurance coverages. So, here we go – 6 risks your business faces and the accompanying insurance solution.
6 risks that tow truck businesses face
1. You or one of your drivers gets into an accident.
Of course, you spend a lot of time on the road. What if, one day, you or one of your drivers gets into an accident? You might injure the other driver, and you could cause some fairly serious property damage (a tow truck is a hefty vehicle, after all.) And when that happens, you could be responsible for covering the costs of the other driver’s medical bills and car repairs (or replacement.) And what if the other driver sues you? Then you’d have legal expenses to cover, and you could have a court-ordered award or a settlement to pay.
That’s where auto liability insurance can help you. It’s made up of two “sections”:
- Bodily injury liability can help you cover the costs of the other driver’s medical expenses, and it can also help you cover your legal fees if they choose to sue you.
- Property damage liability can help you cover the costs of repairing or replacing the other driver’s car.
Basically, auto liability insurance can help you cover your legal obligation to the other driver if you or one of your drivers is in an at-fault accident.
2. Your tow truck could get damaged or stolen.
Tow trucks and wreckers aren’t cheap. They’re quite pricey, actually. And if anything happened to your truck, it would be a problem – you rely on those trucks to keep your business running the way it needs to.
Physical damage insurance can help you get your tow truck back on the road as quickly as possible if it’s damaged. (Your liability insurance will NOT pay to replace or repair your truck if it gets hurt.) Collision and comprehensive coverage are a part of physical damage insurance.
- Collision coverage can repair or replace your tow truck if you’re in an accident or if you collide with something else (i.e. hitting a telephone pole.)
- Comprehensive insurance can cover losses that are NOT caused by a collision or accident, such as fire, theft, vandalism, animal strikes, and falling objects (i.e. trees.)
3. Your client’s car is damaged while you’re towing it.
Okay, here’s another risk you face:
What if you’re towing a car – and something happens to the client’s car while you’re towing it? For example, if you’re towing a car and you get into an accident that causes the customer’s car to get smashed like a pancake. Or if your driver gets the car where it needs to go, tries to unload it, and the car rolls backward…into a telephone pole. Whoops. Well, the vehicle was your responsibility, right? If you’re transporting a car, you need to make sure that the car is covered while it’s hooked up to your tow truck.
On-hook/in-tow insurance can do just that – it can cover the customer’s car while it’s attached to your tow truck or wrecker. (Fun fact – if you live in Texas or Virginia, you might know this coverage as garagekeepers insurance.
4. Your client’s car is damaged while it’s on your property being stored.
If you ever have care, custody, and control of your clients’ cars, there’s always the chance that something could happen to the vehicle while you’re responsible for it. As a tow truck business, you might store cars on your property while you’re waiting to bring the car where it needs to go. But what if there was a fire and the client’s car was destroyed? Or what if someone jumped the fence to your yard and vandalized the vehicles – or stole one of them? Those cars are in your care, and if something happens to them on your watch…well, that wouldn’t be good.
But garagekeepers insurance can protect the client’s vehicle while you have care, custody, and control of it – like if it’s parked on your premises overnight while you’re waiting for the customer’s preferred auto repair shop to open in the morning. It can cover losses like fire, vandalism, theft, explosion, and lightning. That way if something happened to a client’s car, you’d be covered.
5. The services your business provides causes someone bodily injury or property damage.
Okay, so you’ve got auto liability insurance to cover bodily injury and property damage caused by driving and your tow truck…but what if the day-to-day operations of your business or the services you provide cause someone harm? For example, what if your driver is doing a roadside assistance call and they change a tire, but the tire pops off a mile down the road when the car’s owner drives away? They might be in a serious accident, and your business could be liable.
That’s where garage liability insurance can protect your business. It can help you if the services your business provides cause someone bodily injury or property damage.
6. You accidentally repossess a car you’re not supposed to.
If you do repos…it could happen.
What if the request to repo a car takes a few days to get to you, and in the meantime, the owner of the car has made their payment? If you don’t verify with the bank before going to pick up the car, you might have taken a car that was actually all squared away.
Or what if you flat-out take the wrong car? Some cars look very similar.
Or you could fail to get a written notice from the bank. A verbal request is not enough when it comes to repos, and you could be opening yourself up to a wrongful repo risk if that happens.
But wrongful repossession insurance can protect you against these sorts of claims. It can cover the risk that businesses that do repos have of repossessing a car that actually isn’t supposed to be repossessed.
These are some common risks that tow truck businesses face. Now, not that we want to sound pessimistic or anything, but things happen. You never know what kind of curveballs life is going to throw at your business, and that’s why it’s so important to be protected with the right insurance.
And that’s where our tow truck insurance experts can help you. We understand the risks you face, and we can help you get the coverages you need to protect your business from them. We can get multiple quotes for your business so you can compare coverages and pricing. Getting started with your quotes is easy – all you have to do is fill out our online quote form or give us a call today.