Today it seems like all your favorite foods are available on wheels. Famous chefs have replicated their brick-and-mortar restaurants as mobile versions, and countless up-and-coming stars of the culinary world are testing their fare on food trucks. And while having a kitchen on wheels might seem like a simpler way to start a business than breaking ground at a permanent address, the reality is that food trucks are exposed to a unique set of risks that owners need to protect themselves against. We’ll discuss all the necessary food truck insurance considerations and coverage options in black and white, but first let’s cover a few basics.
What is a Food Truck (According to Insurance Companies)?
Even though food trucks come in a many shapes and sizes, the basic principle is that a food truck is a mobile business. Food trucks offer great opportunities to test the success of your business in multiple locations, take advantage of high-traffic like festivals as well as public and private events, more easily than traditional restaurants since they already have a means of transporting their equipment.
From an insurance standpoint, however, it’s important to understand that you are dealing with both a business and a vehicle – which means both will need to be covered.
Food Truck vs. Food Trailer: Which Insurance Do You Need?
Not all food trucks are created equal. (And we’re not talking Yelp reviews.) Before insuring a food truck, you will need to know the type of food truck that you will be covering.
Food Truck Insurance
If you have a “traditional” food truck, meaning an all-in-one kitchen and vehicle combination, a commercial auto insurance policy will provide liability coverage while on the road as well as comprehensive and collision for the vehicle itself.
Food Trailer Insurance
If your business is a food trailer, meaning it’s towed by a vehicle that is separate from the kitchen portion, the vehicle used for towing will need to be insured on a commercial policy. While personal auto policies normally provide liability coverage for damage caused by a towed trailer, most do not extend coverage to a food trailer.
To insure the trailer for comprehensive and collision coverage while it is being towed, you’ll also need to purchase an additional endorsement on the commercial policy. Whether insuring a standalone food truck or a truck and food trailer, comprehensive and collision coverage will normally cover the vehicle and/or trailer against damage while it is parked or on the road.
What Insurance Do You Need for the Business Itself?
Because food trucks are mobile businesses, their risk exposure can only be covered properly by multiple policies working in concert with each other. Commercial auto insurance serves to provide liability coverage and physical damage coverage, but only the physical shell and not the actual contents of the food truck/trailer.
Your Equipment: Commercial Property Insurance
To protect the contents of the food truck, including stoves, food, and even computer equipment, you’ll need a commercial property insurance policy. No matter if the contents are damaged due to a crash, weather, fire, theft or vandalism, commercial property insurance covers the items you use in the course of business against losses.
Liability: General Commercial Liability Insurance
Commercial auto does provide liability coverage, but only for damage caused while the vehicle is on the road. General commercial liability insurance provides coverage for things that happen during the course of business, such as a customer becoming ill after they eat your food, injuries sustained on your premises by non-employees, or damage you may cause to someone else’s property. If you happen to be sued, even if you aren’t actually negligent, this policy will pay for your legal representation in court as well as judgements made against if you lose the lawsuit.
Employees: Workers Compensation Insurance
Since employees are considered part of your business operation, they are not covered by your commercial liability policy the way customers are. Workers compensation insurance provides coverage for your employees’ medical bills and lost wages if they happen to be injured on the job. This type of policy is generally legally required in most states and is a critical safeguard to protect against potential lawsuits filed by employees.
Where Do I Get Food Truck Insurance?
Since food trucks have gained incredible popularity in recent years, many insurance companies now offer all of the above insurance options necessary to run a food truck. You may even receive discounts for having all of those policies with the same company just like insuring your auto and home together.
It is extremely important, however, to understand that you don’t have to have these policies with the same company. To make the best decisions for your business, you may want better coverage that isn’t offered by the company carrying your other policies, or there may be a less expensive option with the same coverage amount through a different company. The main thing to consider is that you have options, and shopping around with as many companies as possible is the only way to find the best coverage at the lowest rates.