What Kind of Insurance Do I Need for a Tow Truck?

Cars break down—it’s a known fact and one of the fundamental truths of Murphy’s law (anything that can go wrong, will go wrong). When things go wrong with a car, who ya gonna call? A tow truck, of course. Whether it’s a collision or a breakdown, tow trucks are an essential part of making an extremely stressful day less stressful. If your business offers tow truck services, your trucks have been tasked with the important job of rescuing stranded cars and getting them to the shop safely.

But who’s protecting your trucks and drivers while they’re doing that? That’s where InsuranceHub can help with tow truck coverage.

Who needs Tow Truck Coverage?

There are lots of businesses that have tow trucks ready to go. You might be a tow truck company, or you might be a repair shop that offers towing services. If your business is one of the above, we recommend you think about getting tow truck insurance. There are a lot of moving parts (no pun intended—okay, maybe a little) when it comes to your tow trucks. First, there are the trucks themselves. Then, more importantly, there are the drivers. There are also the cars that your trucks transport. As if that wasn’t enough, your business might keep your clients’ cars on the premises while they’re being repaired, which causes additional risk. But not to worry—each of these are potential risks that we would love to help your company prepare for.

Check out our winter tow truck gear guide.


What is Tow Truck Coverage?

Tow truck insurance will help protect you if the unimaginable happens and one of your trucks gets into an accident or encounters another type of misadventure.

The main areas that many tow truck plans will cover are:

  • Auto liability insurance (including bodily injury and property damage)
  • Medical payments insurance
  • Physical damages coverage
  • Uninsured motorist insurance

Auto liability insurance can cover damage or harm that your company might cause to someone else. Medical payments insurance can take care of the medical bills for you or any passengers in the vehicle. Physical damage insurance is for damage done to one of your trucks, whether or not that damage is caused by a car accident. Finally, uninsured motorist/underinsured motorist insurance can protect you if a driver who doesn’t have enough insurance or no insurance at all causes an accident.

Are There Any Other Types of Coverage Your Tow Truck Business Should Consider?

Now, these types of coverage relate to many types of commercial auto insurance (which is for businesses that use company cars to function). There are other coverages that you might want to consider for your tow truck business.

Workers’ comp:

Workers’ compensation insurance protects your employees. If one of your employees or drivers gets hurt on the job or becomes sick because of their job, workers’ comp will cover their medical bills. It can even cover a portion of their lost wages if they’re unable to work, and it can provide death benefits to the employee’s family if they are killed while working. Towing can be a dangerous job, so it’s important to make sure that you have a way to help your employees if they get hurt while working. It only takes one injured worker to end what you have worked so hard to build.  We recommend worker’s comp even if the State law does not require it. Your company will be and is still responsible for paying for the worker’s injuries, even if the law does not require you to carry it until you have the stated number of employees for that State.

Excess liability:

Excess liability insurance provides extra insurance on top of an underlying insurance policy. For example, you can have excess liability insurance on top of your auto liability insurance policy. If you were to exhaust the limit of coverage on your auto liability insurance policy, your excess liability would kick in and pick up where your auto liability insurance left off. Prior to 2000, doctors’ malpractice was the lawyers’ target for large sum judges. This hole has been plugged by tort reform, and now lawyers are targeting the transportation industry. Lawyers are winning nuclear judgments every day. A nuclear judgment is a judgment that could have settled for a lower amount but instead ends in an award of tens of millions of dollars after a jury trial. Having an excess liability policy can provide a little padding when you have a claim. You do not have to carry one, but we cannot issue one after a claim occurs. Excess liability provides more peace of mind for only a small premium each year.

Garage keepers:

Like we mentioned above, your shop or business might keep clients’ cars on your premises while they’re being repaired. This places additional responsibility on your business. Thankfully, there’s insurance called garage keepers coverage that will protect you if something were to happen to a client’s car while it’s in your shop.


Plus, there’s a kind of coverage called on-hook towing insurance that will protect your client’s car while it’s being transported—makes sense if you’re in the business of hauling cars! These are recommended to protect your company from any disaster that could happen that involves one of your client’s cars.

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Garagekeepers covers losses like vandalism, theft, and fire.

Summing Up

Okay, so that was probably a bit of information overload! Remember, you’re not in this alone. InsuranceHub understands that every business is unique and that each company needs different types of coverage. We would love to take the time to get to know you and your company and help you find the right coverage. We understand the risks that come along with having tow trucks. So, don’t delay—get a quote or contact us today!