What is food truck insurance?
The shift from the brick-and-mortar way of operating, to going mobile, food trucks have brought a whole new makeover to the food industry world. According to IBIS World, food trucks in the US have upscaled to 23,873 in 2020. Like every other industry, food trucks also need to be watchful to protect their business from the possible threats that they may face, such as –
- Vehicle risks
- Operator risks
- Liability risks
- Food spoilage and fire hazard risks
According to Qsrmagazine, your food truck is subject to become vulnerable to these potential risks. To make sure your food truck does not drive out of business, you may opt for food truck insurance.
In this article
Who needs food truck insurance?
Businesses that commonly need food truck liability insurance are:
- Lunch trucks
- Catering trucks
- Vending trucks
- Ice cream trucks
- Concession trucks
- Mobile food trucks
What policies do food truck insurance cover?
Business Owner's Policy (BOP):
A business owner’s policy combines commercial property, business interruption insurance, and general liability insurance as one plan to cover different claims against liabilities such as property damage, customer injuries, theft, and vandalism.
Worker’s Compensation Insurance:
A workers compensation insurance covers claims for all the injuries while on the job, such as lost wages and medical bills of the employees. Except for Texas, this policy is made mandatory for all the states.
When it comes to the food industry, tiny mishaps are unavoidable. In a rush to serve the dish, if a hot pot tumbles and injures your employee’s leg, then worker’s compensation insurance helps to cover the medical bills for it.
Commercial Auto Insurance:
A commercial auto insurance makes sure to cover the medical bills, cost of property damage, and possible lawsuits caused during an accident. This policy is a necessity for businesses that own a vehicle.
According to the survey by Mobile Cuisine, over 80% of food truck users’ have called out their experience as new, exciting, and different. As much as food truck businesses have stylized the food industry, not to forget, it has equally increased the chances of accidents when it is on the road. According to Foodtruckr, food truck accounts to 280,000 accidents every year. When your business model is itself based on a vehicle, commercial auto policy is a must-have.
Commercial Property Insurance:
A commercial property insurance generally helps to cover losses incurred by your business’ assets.
The Food Truck Operator claims that $100,000 investment for the business helps to derive a revenue stream of $250,000 to $500,000 per year. As a food truck owner, you need to make sure you have commercial property insurance to protect your investment in the equipment, starting from your food to the kitchenware, that runs your business.
Commercial General Liability (CGL) Insurance:
A commercial general liability insurance serves to cover property damage or bodily injury claims that arise from accidents.
Restaurants face a myriad of risks and lawsuits against them. According to Eater, back in 1993, McDonald was filed for a coffee lawsuit by a woman who spilled hot coffee on herself. As a restauranteur, if you want to avoid covering for such third-party claims out of your pocket, you need to opt for CGL policy. You can endorse cyber liability insurance to your CGL policy to protect your customers’ sensitive information such as, credit card information.
Commercial Umbrella Insurance:
A commercial umbrella insurance offers to provide extra limits or extends liability coverages when the primary liabilities policies such as commercial auto, commercial property, and general liability policy fail to cover against the third-party claims.
For example- the chandelier placed in the center of your restaurant falls off, destroying all the valuables of your restaurant. When your commercial property insurance doesn’t suffice to cover up for the property damages it made, umbrella policy swoops in to clean up the remaining cost it incurred off the restaurant.
Product Liability Insurance:
A product liability insurance helps to cover costs for illnesses, property damages, and injuries that are caused by defective products sold by a business. This policy applies to all businesses that manufacture or sell products. According to ABC, Heinz was fined with $2.25 million lawsuit for marketing sugar product that was completely misleading.