you can have goods in transit insurance, but the company i used to work for had a disclaimer form that said whilst the vehicle is in the recovery process we accept no responsibility for any damage or loss and they would sign it.. my mate runs a small recovery service as a one man band, he just rang any commercial insurance company and told them what he did and they advised him what he would need and tailored a policy for him. its basicallly commercial vehicle insurance, public liability insurance ( which you do need, if your winch fails and they car goes flying off down the road an hits someone, and trust me i used to do recovery and it does happen) and goods in transit insurance.. if your gonna do this then have a vehicle check form made up, so you go round the casualty vehicle and check for any scratches or dents first and the customer signs it, trust me, customers can be fuckers, if they think they can get there car painted at your expense then they will blame you.. don't do it without it.. if you need any other advise mate message me. i have been involved in recovery for years. dont do it now but can advise you.
PS, always put the casualty vehicles handbrake half on, then if the winch dissengages itself the car will roll off but stop quite quickly reducing any damage likely to happen. Have plenty of small wooden planks with you then if a vehicle is low you can use them to load it. always wear a high viz jacket as it will save your life. motorists would sooner run you over than hit another car if they fuck up. and remember if your recovering at night, that your rear loading lights can dazzle motorists approaching you so they cannot see you stood in the road, even with a high viz jacket.
and watch your payload, vosa are at this precise minute clamping down on recovery vehicles for being over weight. but apart from all this I love recovery work, it is varied and no 2 jobs are ever the same if you get a police contract. go for it mate. good luck mat