What coverage options do you need to insure a mobile business like a food truck or food trailer?
Food trucks are a dime-a-dozen in many cities these days. These mobile restaurants continue to present an appealing option for people looking for quick, handheld meals, allowing ambitious chefs to make a name for themselves with relatively little expense.
To insurance companies, the mobility of these trucks poses a unique risk profile: unlike brick-and-mortar restaurants that remain static, food trucks combine a high-risk foodservice environment with the liabilities of a driveable vehicle. Perils such as fires, injuries from kitchen tools and equipment, food-borne illnesses, vandalism, and theft are very real concerns when it comes to running a mobile food business.
To ensure sufficient insurance protection for a mobile food truck, you’ll need several coverages to work in tandem with one another. You’ll need commercial insurance policies geared toward small businesses to cover the vehicle, its contents, your employees, and your two sources of liability: the truck and the business.
You’ll need a commercial auto insurance policy because the truck is essentially a business. Like a personal car insurance policy, this will cover physical damage sustained by the truck in the event of a collision, along with comprehensive coverage and liability coverage. It does not cover the contents of the truck.
Commercial property insurance would cover business property like stoves, pots and pans, food, and even computing equipment like point-of-sale systems. Any items used for your business that are not affixed to the truck would be protected via property coverage from certain perils like fire, weather-related events, theft, and vandalism.
While a commercial auto policy offers liability coverage, it only covers damage caused while the vehicle is moving — like if a pedestrian is injured by the driver operating the truck. Commercial general liability insurance operates independent of auto liability, covering damage caused during the course of running the business. If your food truck business is sued by a customer alleging your food made them ill — your commercial liability coverage would handle legal fees and representation, even if you lost the lawsuit.
Employees are not covered by commercial general liability policies because they’re part of the business operation. If an employee suffers a bodily injury while working, workers compensation insurance pays for their medical expenses and lost wages. Workers comp is mandated for most employers on a state level and is a critical safeguard to protect your business from potential lawsuits filed by employees.
What insurance do you need to cover a food trailer that’s towed by a vehicle? In addition to commercial insurance for the property, liability, and workers comp policies found above, you’ll need an endorsement to extend your commercial auto insurance policy to cover the towed trailer for comprehensive and collision. Otherwise, the commercial auto policy will only cover the vehicle towing the trailer and the trailer itself would typically only be insured for liability. If the trailer were damaged while parked or in a collision, your insurer would not cover the property damage.
The extent of liability coverage for the trailer may vary, typically relying on weight — applicable for trailers weighing 2,000 pounds or less — so be sure to check with your insurer when purchasing additional coverage. Coverage for comprehensive and collision are worth buying for the peace of mind.
Due to the prevalence of food trucks, quite a few insurance companies specialize in or primarily offer insurance for mobile food businesses. Major insurance companies offer plenty of insurance options for mobile eateries, as commercial and business insurance policies are common cornerstones of their portfolios.
If you already have a personal policy with any of these insurance companies, look into bundling it with your existing business policy.