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Workers’ compensation helps protect your towing employees when they are injured on the job. It can help pay for medical treatment and replace part of their lost wages, whether the injury happens on a roadside call, in the yard or at the office.
Insured ASAP helps towing companies review employee coverage, owner options and customer requirements as part of their insurance program. We work with new businesses, owner-operators adding their first employee and established fleets.
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What does workers’ compensation cover?
Workers’ compensation provides benefits for covered work-related injuries and illnesses under state law. For a towing company, that could include a driver injured while securing a vehicle, a helper hurt using a winch or an employee struck while working beside traffic.
Benefits may include medical care, rehabilitation and partial wage replacement. Employers’ liability can address certain employee-injury lawsuits. Your agent can explain how these protections fit together in the states where you work.
Commercial auto and general liability serve different purposes. Occupational accident insurance also has different benefits and conditions; it does not automatically satisfy a requirement for workers’ compensation.
Who needs to be included?
Review everyone who works for the business, including drivers, helpers, dispatchers, mechanics, office staff and family employees. Part-time and occasional employees can count toward a state’s coverage requirement.
Owners may be included, excluded or eligible to elect coverage, depending on the business structure and state. Review both the company’s obligation to carry insurance and whether the owner’s own work injuries would be covered.
What about drivers paid on a 1099?
A tax form alone does not determine workers’ compensation status. State rules consider the working relationship, including control over the work and other factors. Share your staffing and subcontractor arrangements when requesting coverage.
See the classification guidance from Illinois, Indiana and Wisconsin.
Workers’ compensation requirements by state
The following summarizes common starting points for towing employers. Specific exemptions, ownership rules and work in other states can affect your obligations.
| State | Coverage requirement |
|---|---|
| Illinois | Generally required with one employee, including a part-time employee. Illinois guidance |
| Indiana | Covered employers must maintain insurance or qualify for approved self-insurance; specific exceptions apply. Indiana guidance |
| Ohio | Coverage generally comes through the state fund or approved self-insurance. Ohio requirements |
| Missouri | Generally required with five or more employees; construction employers have a one-employee threshold. Part-time employees and certain owners count. Missouri guidance |
| Texas | Optional for most private employers, with exceptions such as employees working on certain government contracts. Customer contracts may also require it. Texas guidance |
| Wisconsin | Required when you employ three people. A separate trigger applies when combined employee wages reach $500 in a calendar quarter, with coverage due by the tenth day of the first month of the next quarter. Wisconsin guidance |
| Minnesota | Generally required with one employee, including a part-time employee, unless a specific exception applies. Minnesota guidance |
Illinois tow truck registration
Illinois includes workers’ compensation in its tow truck registration insurance checklist. Its limited affirmation for a sole proprietor with no other employees applies to that specific situation. Review the Secretary of State checklist when preparing registration documents.
Ohio employers’ liability
Ohio employers should review employers’ liability, often called stop-gap coverage, separately from state-fund workers’ compensation. A private policy covering employees in other states does not automatically provide Ohio’s primary workers’ compensation coverage.
What do roadside networks require?
Networks may ask for workers’ compensation evidence, employers’ liability limits and a waiver of subrogation. Qualifying exemptions and documentation vary. Agero and AAA Club Alliance publish their own requirements.
Send your customer’s current insurance instructions with your quote request. Your agent can check the policy and any required endorsements before the certificate is issued.
Owner-only and “ghost” policies
A “ghost policy” is an informal name sometimes used for a workers’ compensation policy with no covered employees and excluded owners. An excluded owner would not receive workers’ compensation benefits for their own injury under that arrangement.
Availability depends on the insurer and state. If you hire someone, report the employee and payroll promptly so the policy reflects the business you are operating.
What affects workers’ compensation cost?
Cost depends on payroll, employee duties, states of work, claims history and owner coverage. Accurate job descriptions help the insurer apply the appropriate classifications for driving, repair, dispatch and office work.
Many policies start with estimated annual payroll. A premium audit compares the estimate with actual payroll and operations, which can result in an additional premium or a credit. Keep payroll records and relevant contractor insurance documents organized throughout the year.
Get coverage for your towing employees
Have your business name, ownership details, employee duties, states of work and estimated annual payroll ready. Include prior coverage information and any customer insurance requirements. For a new business, share your expected hiring plans.
We will help you review available workers’ compensation options alongside your truck and business liability coverage.
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Explore our tow truck insurance overview, new towing business guide and roadside-network insurance requirements.
