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American Towman Magazine Presents the Week in TowingApril 24 - April 30, 2019

Who Should Pay for Damages?

Unknown 376f5By Don Archer

A tower recently emailed me who thought he was being treated unfairly by his boss. He asked, "If you have a company phone and drop it and the screen cracks—and the company is paying the insurance—should you, the tow truck operator, be required to pay the deductible?"

I get this question all the time: Who should pay?

Some say the tow operator should "man up" and pay for his mistakes. Others suggest that the towing company has budgeted for certain losses and expects things to happen, so they should pay.

There's no easy answer. Even company owners are all over the map on this. Some feel that placing too much burden on their drivers will make it difficult to retain quality help. Others say that quality drivers don't continually cause damage; and that requiring those who do to pay something will weed out the bad drivers.

Most drivers feel horrible when they cause damage and wish there was something, other than paying the deductible, that they could do to make things right. Others think damages are a cost of doing business, and that rates should be adjusted to allow the company to absorb damages more easily.

Neither group believes that damages should affect compensation.

So the question remains ... who should pay?

I ask, "What does your company policy say?"

The question continues to come up because most towing companies don't have a written policy in place that spells out exactly who pays for what when damages occur. Not having a written policy in place is a problem for more than a few reasons.

First, when you don't have a set policy for dealing with damages, you must then rely on your own judgement.

Of course it's your business and I'm not suggesting there's anything wrong with your judgement. You probably have a good idea for who is careful and who's not.

But imposing unwritten rules can be risky. When you rely only on your judgement and choose to impose unwritten rules on the fly it might be considered arbitrary punishment. If a disgruntled driver feels like you've singled him out, this could be considered discrimination and you could be setting yourself up for a lawsuit.

On the other hand, if it's written and made clear to everyone that this policy applies to all equally, there's no ambiguity.

Besides the obvious benefit of shielding yourself from being sued, having a damages policy in place does something else: it sets expectations. When drivers know that you expect them to care for company property and understand that there are real-life consequences for not doing so, they will come up to the task.

Lastly, it's good for business. Disregard for company property can lead to maltreatment of a customer's property. Nothing can harm your business more than the negative "press" you get when you damage someone's car. Having a damages policy that includes a progressive discipline policy can help to not only deter damages, but it also helps weed out offenders before the problem is exacerbated.

So who should pay? It's up to you. You built your business, and only you know what's acceptable. But whatever you decide, put it in writing, assure all will be bound by it, know it, and sign-off on it.

(Note: This article originally appeared in the February 3, 2016 edition of Tow Industry Week)

American Towman Field Editor-Midwest Don G. Archer is also a multi-published author, educator and speaker helping others to build and start successful towing businesses around the country at Don and his wife, Brenda, formerly owned and operated Broadway Wrecker in Jefferson City, Mo. E-mail him direct at
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