by Edward Sneneh, Chicago tow truck insurance licensed expert

Tow truck businesses in Illinois are required to meet certain insurance requirements before a permit is issued to them by the State of Illinois to practice their towing operations. Illinois tow truck businesses are required to carry tow truck liability insurance coverage, garage liability insurance for the towing business, & on hook insurance for the trucks.

Tow Tuck Liability Insurance in Illinois

Liability insurance for tow trucks in Illinois is mandated by the State. A minimum of $750,000 liability limits is required for all towing operations that runs an Intrastate trucking operations which require an ILDOT permits and need to be licensed as 'tow truck for hire' by the State. A liability certificate must be filed by the insurance carrier directly with the State.
Chicago Tow Truck Insurance

On Hook Insurance for Tow Trucks

On Hook insurance covers vehicles owned by the customers while the vehicles are 'on the hook' or 'in tow'. It is one form of Garagekeepers liability. On Hook Insurance is a physical damage insurance coverage offered by insurers on legal liability basis (as opposed to the better form known as Garagekeepers Direct Primary.) On hook does not cover vehicles towed while in storage and towing businesses that store customers vehicles are urged to obtain that 'off hook insurance'.  On Hook insurance must be filed with the State of Illinois for an ILDOT to be issued.

Tow Truck Physical Damage Insurance

An optional coverage is called Tow Truck Physical Damage Insurance, a coverage that provides protection for comprehensive and collision losses resulted to the towing trucks. Owners of older and less expensive trucks may not find this coverage important. However, tow trucks that have lienholders listed may be required to have this coverage.

Garage Liability for Tow Trucks in Illinois

Perhaps the most unfamiliar coverage relevant the Illinois towing business is the Illinois Garage Liability for Tow Trucks. If tow truck businesses have the legally required tow tuck liability insurance & the on hook insurance for tow trucks, why do they still need the garage liability for their towing businesses?

The liability insurance offered on the tow trucks cover only auto accidents related to the trucks scheduled on the policy. Any accident that does not involve the operation of the scheduled trucks will not be covered. For that reason, any property damages or bodily injuries that are caused by the towing business, but are not resulting from the operation of the scheduled truck would not be covered.

But there are many examples where the towing business may cause property damages or bodily injuries from the operations of the business, other than the operation of the tow trucks. For example the tow truck driver or helper may cause property damage or bodily injuries to others while preparing a tow (not from using or while driving the tow truck.)  Damages and injuries caused in the course of running the tow truck, but not from using the tow trucks, are covered under garage liability.
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