Over the course of the past year, many independent towing businesses have been forced to shut their doors. This isn’t due to an increase in risk, though towing companies continue to face high risks due to angry drivers and heavy equipment, but is due to an increasingly small number of insurance carriers willing to cover them. Instead, many towing companies are forced to parse out different aspects of their insurance through different agencies. Whether your insurance company is providing total or partial coverage for the liabilities towing companies face, many need excess coverage to deal with auto liability and physical damage.
- The market as a whole is facing a negative trend. According to Fitch Ratings, the commercial auto market is an underperforming sector of the market for property and casualty insurers, with underwriting losses for the past five years. While this doesn’t mean that towing companies should be written off as uninsurable, it does mean that they make for risky clients and adding an additional coverage element for excess liability is the best way for them to stay covered and operating.
- The cost of litigation is increasing. As claims become more and more common, even for towing companies staying compliant and following the law during each of their jobs, the cost of litigation increases. Towing companies increasingly have to face the choice between settling even in the event of little to no wrong-doing or facing a lengthy legal process that can cost their business even more. If your clients are reaching the limit of elements of their coverage, broach the idea of excess coverage to help them stay in business and to help keep your client base stable.
The towing and commercial auto industry are facing a hard time. The emerging market for driverless vehicles is making profit margins slimmer and litigation is becoming more and more common for every company regardless of their history or policies.
Contact Prime Insurance Company here if you want to present your towing clients with modified insurance plans that can help them face these increased risks.