How much is commercial tow truck insurance?

Tow truck businesses pay an average of $737 per month, or $8,839 per year, for commercial auto insurance.

If your tow truck is involved in an accident, commercial auto insurance would help cover legal costs, medical bills, and any damage you caused. For example, if your tow truck rear ends another vehicle while transporting a customer's car to an auto body shop, it would pay for damage to the other car and the cost of hiring an attorney if they sue.

Most states require this coverage for vehicles owned by a business. If you personally own, rent, or lease a tow truck, then you'd want to buy hired and non-owned auto insurance (HNOA) instead. Each state has its own requirements for how much auto liability coverage you need.

For complete protection, you'll need other types of car insurance as well. On-hook towing insurance and garage keepers insurance cover damage to customer vehicles in your care and may be required in some states, like California.

You can also buy physical damage coverage, such as collision or comprehensive coverage, to pay for damage to your tow truck from collisions, vandalism, falling objects, and similar incidents.

The cost of commercial vehicle insurance depends on many factors, including your policy limits and deductible, the types of tow trucks you own, the value of the towed vehicles, and the insurance options you choose. It'll also cost less to insure tow truck operators with a clean driving record over those who've been involved in an accident.

Towing companies pay an average of $58 per month, or $700 per year, for general liability insurance.

A general liability policy is often required in order to comply with state laws for tow truck licensing. You might also need it to sign a commercial lease, get a business loan, or work with some clients.

General liability coverage protects your small business from common third-party risks, such as an accident that results in a bodily injury or property damage. For example, if a passerby trips on a chain that a tow truck driver left on a sidewalk, a general liability policy would pay for their medical bills or legal defense costs if they sue.

This policy can also pay for lawsuits related to copyright infringement and defamation, including slander and libel. That makes it important for small businesses that have a website or promote their services on social media.

Below is the average general liability insurance policy for tow truck companies that buy from TechInsurance:

Premium: $58 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $1,000

If your business is small and low-risk, TechInsurance's licensed agents usually recommend a business owner’s policy (BOP). A BOP bundles general liability insurance with commercial property insurance at a lower cost than buying these policies separately.

The cost of general liability insurance is based on numerous factors, including the type of towing operations, the policy limits and deductible you choose, the size and location of your business, the number of employees you have, and any additional insured endorsements.

Trucking companies pay an average of $650 per month, or $7,795 annually, for workers' compensation insurance.

Workers' compensation insurance covers medical costs and disability benefits when you or an employee suffers a work-related injury or illness. For example, if an employee is injured when a customer's vehicle rolls back unexpectedly, this policy would pay for their medical bills and lost income while they recover.

Most workers' comp policies include employer's liability insurance, which pays for legal defense costs in the event of a lawsuit related to a work injury.

To comply with state laws and avoid penalties, towing businesses with one or more employees typically must purchase this policy. Workers' comp isn't usually required for sole proprietors or independent contractors, but it's still recommended since most health insurance plans can deny claims for injuries that happen on the job.

The cost of workers' compensation insurance is based on several factors, primarily the number of employees you have and their occupational risks. Other factors, such as the cost of medical treatment in your state, can also affect your premium.