Starting your own food truck business is a venture that is equal parts exciting and nerve-racking. With all the moving parts that need to be addressed, you have to think of everything before it happens. From hiring employees to finding the right truck for the job, you will have a lot of work to do. Not only that, but you will also need to learn what type of insurance is needed for a food truck business.
Insurance is an important part of this picture because of the protection that it provides for your business, as well as yourself. If you do not purchase the proper insurance to fully cover your food truck, you could potentially be out thousands of dollars when something goes wrong. Understanding where your insurance coverage ends and your liability in certain situations is imperative.
Required Insurance Policies For Food Trucks
Sometimes, one policy may not even be enough to fully cover you, and knowing what policies you will need can save your business from huge losses. Here are the different insurance policies that you should know about, and what type of insurance is needed for a food truck business.
Workers Compensation For Injuries
Many states require a food truck business to carry workers’ compensation coverage to provide necessary medical benefits and wage compensation for employees who get injured on the job. Depending on what state you operate in, you may be required to have this, but if not, you put yourself at great risk by not having this coverage.
Not only does workers’ comp pay out money for medical expenses and lost wages while the employee is unable to work, but it is also beneficial to your business because of the legal issues it prevents. Workers may come after your business in court if they can’t cover their expenses while out of work, and this could cost you too.
Without this coverage, you could end up paying out of pocket for legal fees, medical bills, and your employees’ lost wages. This adds up to a large sum and could cause you to lose your business if you are unable to pay. Save yourself the time and trouble of having to pay these expenses by having workers’ comp. Your business will be much better off for having done so.
When owning any type of property for your business, having property damage coverage can protect you if there is a fire, vehicle accidents, vandalism, or theft. If any of these incidents occur with the truck or anything attached to it by bolting, or plumbing and gas lines, you will not have to cover the cost of repair or replacement.
With this insurance, the only things that will not be covered are items that are not attached to the truck, meaning it would fall if the vehicle was turned over. These items may include things such as cooking utensils, pots, and pans, and will require their own insurance coverage.
General Liability Insurance
Just like liability insurance for automobiles, this type of policy covers property damage or injury that occurs to a third party—or those who are not employees. Although this does not include vehicle-related accidents, it does include customers or bystanders slipping, food-related illness, property damage, and slander and libel coverage.
An important addition to this policy is financial assistance with legal fees and claims should your business face a lawsuit stemming from one of the issues mentioned above. Attorney costs and court fees can add up quickly and could cost you a lot of money over time. Having this coverage offers you protection from paying that money yourself.
Your food truck is the livelihood of your business, so getting it fully covered by a comprehensive collision policy can help you stay up and running after an accident, theft of property, or vandalism to the vehicle. This policy covers the truck itself and all the attached equipment inside.
According to the definition of “attached” for this policy, this will cover all items that are bolted to the truck and all equipment that is connected through a plumbing or gas line. Other items that are essential but are not attached will need additional coverage.
Contents Insurance Coverage
Because vehicle coverage does not insure the contents that are not attached to the truck, additional coverage must be acquired to insure these items. For food truck operators, this could include pots, pans, and other cooking equipment that is needed for running the business. Many owners overlook this coverage, mistakenly thinking they are covered by property insurance. Make sure to avoid this mistake and get the additional coverage necessary.
Automobile Liability Policy
As a mobile restaurant, you will need to have an automobile liability policy to cover your business in case of an accident while on the road. These policies will cover personal injury or damage to property once you are driving the vehicle. It should be noted that this policy is only in effect when the truck is moving. If you are parked at a certain spot while operating the business, the general liability policy will apply.
If you want to be fully prepared for the worst, you can also add on other policies that provide coverage beyond the liability limits of the options above. This can often be a good idea for times when you are unable to operate the truck. Policies like coverage for loss of income while you are getting your vehicle repaired can be great, and additional coverage can give you what you need to stay in business.
Speak to Experienced Insurance Brokers
Understanding the risks involved in the food truck industry will protect your business from liability. If you would like to know more about what type of insurance is needed for a food truck business, contact the entertainment insurance brokers at MFE Insurance today.