Workers Comp Requirements by Don Archer
I
n more and more cities throughout the country, towing companies are requiring an up-to-date Workers Compensation policy from anyone removing vehicles from their lot. Many claim the intent is to cover their interests in the event an individual sent to their property is ill-trained, makes a mistake loading and injures himself. Is this the real reason, or is it just an attempt to thwart the competition by putting up more barriers to entry?
One Scenario In an effort to mitigate loss by avoiding more storage fees, ABC Motor Club calls John, the owner of a onetruck towing business, to do a secondary tow from a non-contracted towing business back to his place. He arrived with the necessary paperwork and waited for the shop manager to point him to the car. The towing and storage bill were already taken care of, and the motor club had authorized him to move the vehicle—it should have been smooth sailing. As John stood there waiting for the OK, the shop manager eyeballed the paperwork. Never seeing John before, asked, “What company you with?” John said, “Royal’s Towing. We’re over on the east side. It’s just me and my wife really; we’re just getting started.” Then the shop manager asked, “Do we already have your workers comp on file?” “Ah, I don’t have workers comp; it’s not required,” John said. The shop manager handed the papers back and said, “I’m sorry but we require it, and you can’t pick up the car unless you have it.” Feeling all the blood drain from his face, John stepped back and said, “Uhh, the state says we’re not required to have workers comp. I don’t have any 12 • February 2017 - TOWMAN.COM
Workers comp is a necessity you just can’t afford to live without. Shutterstock.com image.
employees. I just need to pick it up and go.” The shop manager replied, “Well, although the state does not require you to have worker’s compensation—we require that everyone who sets foot on our property provide an up-to-date certificate of insurance. It’s designed to keep us free from frivolous lawsuits … you understand.” Embarrassed and upset, John stood there a moment with his mouth agape and then replied, “I can’t afford workers comp. I’ve looked into it and I’d be working for peanuts if I had it.”
Barrier? Some tow owners say that requiring workers comp is done to deter do-ityourselfers from using substandard equipment and zero safety guidelines to load wrecked vehicles themselves. In an attempt to avoid a nominal towing fee, and armed only with a come-a-long and a 1,500-lbs. trailer, many towing company owners have had the displeasure of watching and wincing as men, women and children push, pull, and do whatever is necessary to load a vehicle—in the process some have been harmed.
Many towers can attest that frivolous lawsuits are a dime a dozen. Common sense and personal responsibility go out the door when tempers flare. We all know that society’s run amok, but should towers be doing this to one another? Some suggest that requiring proof of workers comp is good for the industry by protecting the very towers who are required to have it. It also gives shop owners peace of mind in a litigious world. More than that, it helps to level the playing field. To those just starting out this can be a seemingly insurmountable obstacle. How can you be expected to pay $300 to $500 or more per month, when you’re only bringing in $2,000? But just like tires for your truck, and a good pair of boots, workers comp is a necessity you just can’t afford to live without. Requiring it of all who participate is a step in the right direction.
Don G. Archer is a multi-published author, educator and speaker helping others to build and start successful towing businesses around the country at TheTowAcademy.com. Don and his wife, Brenda, formerly owned and operated Broadway Wrecker in Jefferson City, Mo. He is the Tow Business Editor for Tow Industry Week; email him direct at don@thetowacademy.com.
