All You Need To Know About Food Truck Insurance Coverage

All You Need To Know About Food Truck Insurance Coverage

Confused by the complexities of food truck insurance coverage and not sure what exactly you need? We get it. It can be confusing, so we’re going to break down the different types of coverage for you using understandable language (and not insurance-gibberish).

First, take a look at the visual cheat sheet we’ve created. Below that, we’ll get into the specifics of each type of insurance to give you a well-rounded understanding of your specific needs and insurance options.

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Save this graphic and keep it handy so you always know what you have covered and what you don’t. Now, let’s go a little deeper into these food truck insurance coverage types.

 

General Liability Insurance

Whether you’re after bare bones protection or a full suit of armor around your business, this coverage type is a must.

General liability acts as protection against lawsuits brought against you. It covers your products (food and drinks), your premise (slip and fall), personal injury (including libel and slander), and property damage to others.

Keep in mind that this type of insurance covers damages to others, but it does not cover you, your employees being injured, or damage to your own vehicle. Nor does this coverage effective for accidents that occur while you’re driving.

A few specific instances where general liability covers damages:

  • A customer gets sick from your food
  • A customer slips and falls on a mat you placed outside
  • Another business accuses you of libel or advertising injury
  • Your patio cover falls and breaks another truck’s window
  • All the legal fees associated with the incident (even frivolous claims where you are not at fault)

The common coverage limit is $1,000,000 per occurrence and $2,000,000 total per year.

Most landlords, vendors, and commissary kitchens require general liability, so you should plan on including it in your policy.

 

Food Truck Insurance icon

Property insurance coverage for your truck and the attached equipment

Don’t let the countless hours you invested into your food truck go to waste with a single driving mistake or a severe stroke of the weather. Food truck coverage protects your truck and all its attached equipment in the event of a collision, vandalization, theft, flood, fire, and a few other types of losses.

Remember that “attached equipment” specifically refers to items that are attached via bolt, plumbing, or gas line. Plates, pans, rolling carts, food, and anything else that’s not securely bolted down is not covered by this coverage. For those items make sure you get contents coverage (listed below) as well.

 

Food Truck contents and equipment coverage.

Coverage for items NOT attached to your Food Truck

Contents coverage is for all the things that are not bolted down or attached via plumbing or gas line, but are still a part of your food truck business. Your cooking utensils, your chairs, and even your POS system fall into this category.

 

Food Truck Auto Insurance

Auto Liability

Your greatest liability risk as a food truck owner is not the food you serve, but the truck you drive. Food-related claims are uncommon, but driving mistakes on the road happen all the time.

Auto liability insurance covers injury or property damage to others while you are driving, and only when you are driving. Once you are parked and open for business, your general liability coverage takes over.

 

Food Truck Work Comp Icon.

Workers Comp

Worker’s compensation insurance (commonly known as “worker’s comp”) covers you when your employees are injured while on the job. With this type of coverage, injured employees will have access to wage replacement pay and medical benefits.

Most states require you to carry worker’s comp insurance by law, but a few leave it optional. If you’re not sure what the law says in your state, The National Federation of Independent Business offers a state by state list of workers comp requirements.

 

Umbrella Insurance For food trucks icon.

Additional Coverages

There are a variety of coverage “add-ons” available to suit your specific needs. Let’s take a look at a few of the more common add-ons.

  • Umbrella insurance – Worried a claim cost may exceed the basic limits of your coverage? This add-on extends the financial benefit to cover large claims and is often required by large contracts.
  • Food spoilage insurance – Serve a certain type of food that tends to spoil quickly? This insurance will keep it from eating into your bottom line.
  • Loss of business income insurance – If you suffer a collision and have to get your truck repaired or replaced, the lost income over days or weeks can end up being thousands of dollars. This coverage type compensates you for that lost income and is, in our minds, one of the best additional coverages.

There’s a whole slew of add-ons, so if you have any uncommon truck features or business practices, let us know and we’ll find the right coverage.

 

About Insure My Food

Insure My Food provides insurance coverage for an array of mobile food vendors such as food trucks, food trailers, concession trailers, pop, vendors, concessionaires, snow cone stands, and more. Our goal is to help you protect your business with insurance that fits your specific needs so that you can focus on the aspects of your business that matter most.

We have over a decade of insurance experience and a deep understanding of the often complex (and ever-changing) mobile food industry. We also partner with several different insurance carriers to make sure your food truck process is affordable and easy.

Want an insurance quote? Click here or give us a call at (800) 985-7859.

Top Ten –  Insurance Mistakes for Food Trailers and Food Trucks

Top Ten – Insurance Mistakes for Food Trailers and Food Trucks

Top Ten – Insurance Mistakes for Food Trailers and Food Trucks

Insuring your food truck or trailer can be a messy business. Legalese, weird gimmicks, and confusing rules are all over the place – and it can be difficult to make sure you’re actually getting the coverage you need.

Let’s run through the most common mistakes mobile food business owners make when they purchase insurance – as well as tips on how to avoid them.

1. Buying The Lowest Price Policy You Can Find

Choosing low-cost insurance can – ironically – end up costing you a lot of money.

Many low-cost policies have a remarkably small list of claims they cover. You may find yourself with a surprise bill if something happens and the insurance only covers the event partially – or not at all.

Like with most things in life, you get what you pay for when it comes to insurance. And since insurance companies are continually pressured to lower prices, they’re also forced to reduce plan benefits. This hurts the relationship between the insured and the insurer, especially when claims are filed that aren’t covered by the plan.

We advise you to be thorough when it comes to evaluating your specific needs. Don’t just jump at the lowest price – jump at the plan and agency that fits you best.

2. Paying Extra For Additional Insurance Certificates

Commissary kitchens, landlords, event managers, and city health departments often require that you present them with additional insurance certificates. Frustratingly, many insurance agencies charge you between $10 and $50 for these certificates – which are just sheets of paper.

We don’t charge you extra to process additional certificates. And since our average client needs 20 of these additional certificates per year, we save them up to $1,000 annually.

There’s no reason an insurance agency should surprise you with an additional charge for something as simple as an additional certificate.

3. Incorrectly Classifying Your Truck And Property Values

The insurance world considers your food truck or trailer and your other property as two distinct things with two distinct coverages. This means that property coverage doesn’t include your truck/trailer unless specifically stated on your policy.

Many food truck owners assume wrongly that property coverage is enough. And you can imagine how unpleasant of a surprise that is when they try to submit a claim for their truck.

Here’s what the value of your truck/trailer entails:

  • The value of the truck or trailer on its own
  • The value of “permanently attached equipment” (attached via plumbing or gas)

Everything else is considered “business property” and needs to be listed separately on the insurance policy. For a better look at how this works, check out our blog: How much is my food truck worth?

Tip: Make sure to update your policy when you install new equipment and raise the value of your truck. If you forget, the new items will likely not be covered.

4. Covering Your Trailer On Your Personal Auto Insurance

You’d be surprised at how many people believe that their personal auto policy automatically extends coverage to their food truck or trailer. Your business truck/trailer will not be covered by your personal auto insurance.

The confusion comes from the fact that many auto liability policies will still cover the accident for the other vehicle if you’re pulling a trailer (though you should confirm with your policy).

For example, if you get in an accident while pulling a trailer, your personal auto liability insurance would cover the damage to the other party’s vehicle. However, the physical damage to your own trailer would not be covered.

5. Accepting A Deductible On Your General Liability Policy

Some agencies sell general liability policies that include a deductible that you are responsible to pay before the insurance company starts to pay up on a claim. While this may feel normal since it’s the case with health insurance, it’s quite problematic when it comes to food truck insurance – and you shouldn’t have to put up with it.

Auto claims are rarely cut and dry when it comes to your liability and how much you owe, which means deductibles add a whole new layer of stress and complexity that’s completely unnecessary.

With no deductible, you can file the claim then let the insurance work out the legal fees and handle the claim. This way is much simpler, streamlined, and eliminates a handful of extra costs.

6. Purchasing Insurance Valid Only At A Certain Address

Once again, you’d think that mobile businesses wouldn’t limit their insurance coverage to a single address, but it does happen from time to time. You don’t just want your truck/trailer covered in a couple parking lots – you want it covered everywhere.

Granted, this mistake is often completely accidental since insurance policies originally were designed to cover businesses operating from a single location and, thus, typically only cover a single address by default.

But you’re not working from a single location. Your business moves around – and you need a policy that moves around with you. For this reason, be mindful that your insurance agency isn’t giving you standard policy that isn’t a good fit for your mobile business.

7. Select An Agency That Does Not Process Certificates Same-Day

Need a last-minute certificate of insurance? Many companies refuse to process these on the same day, which can be a major problem for food truck owners who show up to events that require a certificate but didn’t tell vendors in advance.  The nature of this industry is quick and ever changing, and you need an insurance company that will keep up with your needs in a pinch.

8. Buying From An Agency That Doesn’t Specialize In Mobile Food Businesses

As you can see by now, there are quite a few quirks to covering your food truck that your average insurance agent won’t have any idea about. Don’t leave your business in the hands of someone who doesn’t know the in’s and out’s of mobile food insurance specifically.

Here are a few reasons you should strongly consider working with a food truck/food trailer specific insurer:

  • They’ll understand your business. A traditional agent may not “get” the mobile business idea, but a mobile food specialist definitely will – and that’ll mean more appropriate coverage, advice, and claims assistance.
  • You’ll have a trusted partner. No more worrying about how you’ll explain your situation to the agent who only works with brick-and-mortar locations. Your agent will be your partner who knows the insurance and business struggles of owners like yourself.
  • Your policy will be better than ever. An agent that knows the mobile food truck business will know the mobile food truck insurance world – which means your policy will be much more fitting than one selected by a non-specialist.
  • Policy adjustments and claims will be easy. New quotes, equipment changes, and service requests will be quicker and easier than if you’re working with someone who always has to “check the rules” for every little thing.

Get the coverage you need from the informed, savvy partner you need.

9. Not Reviewing Insurance Requirements For Specific Events

Insurance requirements can vary widely, which can lead to some headache as a mobile food business. Different states have different food service laws – and even certain cities within a single state can throw you a curveball.

Do yourself a favor and check up on each event’s requirements. Or better yet, send the requirements to your insurance agent to help you review them and advise you on whether or not you need a policy adjustment.

10. Wasting Time With Agents That Don’t Get Your Business

There’s nothing as costly and frustrating as an insurance agent who claims to be your partner but has no idea how your business is structured, what your struggles are, and what kinds of insurance you need.

You don’t have time to walk an uninformed agent through the inner workings of your business (over and over again, probably). Work with one that won’t have to ask the basic questions and who can skip to the important matters of your specific situation.

Every hour you spend figuring out insurance is time you don’t spend focusing on what makes you money and helps your business thrive. Use a trusted advisor who understands you, get the information and policy you need, and move on to the more important things.

We’d love to help with that.

Insure My Food offers affordable insurance made easy for food trailers, food trucks, and mobile food vendors. We offer a one page quick quote form, or check out our other blogs.

7 Reasons your Need Insurance on Your Food Truck

7 Reasons your Need Insurance on Your Food Truck

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If you are not convinced you need proper insurance for your mobile food business, let me share 7 reasons why you should think again!

1) It’s the law. States require all vehicles on the road to carry insurance, even if you do not plan on moving around much, you are required to have auto insurance on a food truck.

2) Opens up opportunities. Without a general liability policy on your food truck, events, landlords, and commissary kitchens won’t work with you. <link to AI blog>

3) Sound risk management and peace of mind. If you invest thousands into your food truck and countless hours building your business you don’t want to see it end in a split second from an accident or theft. Check out our blog on Loss Prevention for a handy checklist to keep your business protected. 

4) It’s socially responsible. The last thing you want to do is injure someone or damage their property with no way to help. Insurance provides a means to compensate others for accidents.

5) Protects your employees. Employees are often like family (or ARE family), and Workers Comp insurance compensates them and pays medical bills if they are injured doing their job.  Still not convinced? We wrote a whole post on the disadvantages of not having Workers Comp Insurance.

6) Legal fees paid for. Insurance companies pay attorney’s fees for insurance claims on your behalf.  Even for frivolous claims.

7) Protection for your assets. Accidents happen.  Without insurance, your assets and your business are on the line.

Insure My Food offers affordable insurance made easy for food trailers, food trucks, and mobile food vendors. We offer a one-page quick quote form, or check out our other blogs for more tips!

How much is my food truck worth?

How much is my food truck worth?

Not sure what your food truck is worth? There are quite a few things to consider – and the trucks themselves can be just as unique as the chefs who operate them.

We get it. You don’t have much time to figure it all out – but you need to. Knowing a food truck’s value is essential in these circumstances:

  • Buying a food truck
  • Selling a food truck
  • Insuring a food truck

With a bad estimate, you risk losing lots of money on the sale or underinsured insurance claim. With an accurate estimate, you can be financially confident and satisfied with your business journey from start to finish.

Lucky for you, we’re going to make this as easy as it can be!

Let’s start with the basic formula for determining food truck value.

Food Truck Value = Cost Of The Truck + Cost Of The Attached Equipment + Labor Cost To Install Equipment

This applies universally, whether your truck is a brand new restaurant on wheels, a second-hand truck, or even a converted school bus.

Next, let’s breakdown each variable in the formula:

Valuing The Truck Itself:

Start by evaluating what your food truck is worth without all the gear and equipment. In insurance language, this is the “Actual Cash Value” or “Current Value” of the truck.

Tip: Items not attached to the truck but kept inside the truck are not part of the truck value. Instead, they’re classified by insurance companies as “Business Personal Property” or “Equipment Not Attached”.

New Truck:

If you have a new truck or are looking to buy a brand new one, you’ve got it easy. There’s no depreciation to factor in, so the value of the truck is simply the amount you paid (the sale price).

Used Truck:

Most people dread the process of finding the value of a used truck, but it’s actually quite simple in most cases. Here’s what you need to do:

  • Search for the same truck online. You should be able to find the same model and year (and rough mileage) on eBay or Craigslist, which will give you a strong estimate of your used truck’s value.
  • Add in your improvements/investments. Update the engine, replace the transmission, or make other improvements? Add those costs to the value of the truck.

Don’t add the truck’s cooking equipment in just yet. We’ll get to that next.

Valuing Attached Equipment:

Now we’ll assess all the equipment that’s attached to your truck. And when we say attached, we mean permanently built-in by bolts, plumbing, or a gas line.

Tip: Flip the truck upside down. Anything that stays put can be categorized as “Attached Equipment”.

Tip: Don’t actually flip over your truck.

New Equipment:

This part is easy. Simply add up the cost of the equipment, as well as the cost of the labor to install the equipment. Even if you did the work yourself, you can still add an estimated installation cost to your equipment’s value.

Used Equipment:

Valuing any used equipment is a bit more tedious, but not difficult. Here’s how we suggest doing it.

  • Take inventory of all your equipment. A sheet of paper or excel document will do fine.
  • Search for used items online. Search for the same items on buy-used sites like eBay or Craigslist to make a value estimate.

When it comes down to it, you’re making estimates. So if you can’t find the used price for an item, don’t worry – just make an educated guess using this next mini-guide.

How to estimate depreciated value:

There’s really only one “rule” you need to keep in mind when estimating depreciated value: generally, kitchen equipment depreciates over a 20-year life cycle. You then need to discover the age of the item, as well as the cost of the item brand new.

From here, it’s actually a simple process.

  • Discover the percentage of life lived. For example, equipment that’s 5 years old has lived 25% of its 20-year life cycle.
  • Subtract that percentage from the brand new price. If the item was $1,000 brand new, subtracting 25% leaves you with a $750 value.
  • Add in labor costs. If it costs $50 to install that item (whether you did it yourself or hired someone to), the equipment value then becomes $800.
  • Don’t forget about aftermarket additions. Did you add any graphics, paintings, wraps, or other permanently attached items? Add those as well.

If you need help with this process, your Food Truck’s original builders can also be a source for valuing the attached equipment. Check out our list of Food Truck Builders Resource Page.

Tip: Create a list of equipment and value during this process to reference in the event of a claim.

You should now be able to plug in all the needed numbers for this formula to find the value of your food truck.

Food Truck Value = Cost Of The Truck + Cost Of The Attached Equipment + Labor Cost To Install Equipment

Non-Attached Equipment:

Equipment in your food truck that’s not permanently attached to the truck is its own separate coverage and limit of insurance. Here are a few examples of these items:

  • Blenders
  • Table Warmers
  • POS System
  • Pots / Pans
  • Non-Bolted Refrigerators

Tip: Have any strapped down tools and items? Those are also considered “Not Attached”. It must be bolted down or attached by plumbing or gas line to be considered “Attached”.

Valuing this equipment takes the same process as valuing attached equipment. Brand new gear is just the new price. Used gear’s depreciated value can be calculated using the 20-year life cycle. However, there’s no labor to calculate with these items.

See? It’s not such a bad process after all. However, if you’re still scratching your head, there’s no need to worry. Give us a call – we’re happy to help!

Insure My Food offers affordable insurance, made easy!  We cover insurance for food trailers, food trucks, and mobile food vendors. We offer a one-page quick quote form.  In addition, we created helpful blogs and resources just for you.  Joel brings over a decade of insurance experience in helping you determine your proper food trailer insurance coverage.

 

How to protect your Food Trailer, Food Truck and Equipment

How to protect your Food Trailer, Food Truck and Equipment

No doubt, you have poured countless hours, and what seems like an endless amount of money to create your food trailer, concession trailer, or food truck business. It makes sense to protect those investments with a good loss prevention plan to prevent all those efforts from being ruined in an instant!

Loss prevention:

An often overlooked first step by many mobile food vendors…how do you prevent a loss from ever occurring?

This is a smart first step for savvy business owners.  Insurance policies will have deductibles to encourage loss prevention and being shut down due to a loss is a huge burden worth avoiding.

1) Inventory your items. This can help recover stolen items and provide a guide to insuring for the proper amount. In the event a claim does occur, your preparedness will speed up the process.

2) Good lighting at night and visibility go a long way in protecting from vandalism and theft.  Think solar lights, motion detecting lights, etc.  There are also a plethora of inexpensive cameras/monitoring devices that are well worth the investment.

3) Take extra precaution in securing high theft items such as generators, cash, and computers. Keep them out of sight and secured when not operating.

We created a helpful printable checklist to cover these items and additional Loss Prevention topics here.

Property Insurance:

Even the most cautious food trailer, food concession trailer, and food truck owners can suffer a loss. Unless you’re prepared to replace your truck, trailer, or equipment out of your own pocket, insurance is a smart way to transfer that risk to an insurance company.

1) Determining the proper value for your truck and trailer is step one. The amount you should insure your truck or trailer for is the actual cash value. In other words at the current value, not the value it would cost to buy a brand new truck or trailer. This total should include any equipment attached by bolt, pluming, or gas line. To read more check out our other blog post, What is the value of your food truck or trailer?

2) Your contents not attached to your food truck or food trailer are NOT covered by the coverage on your truck or trailer. These items can be listed under contents separately. If there are any items over 2500 in value, they will need to be reported to the insurance company.

3) Since insurance companies typically insure property at a specific location this can cause gaps in coverage for mobile food vendors. You want coverage for property that regardless if you are heading to an event or at your main location. The term used for property that moves locations is called inland marine insurance; it’s a must for a mobile food vendor.

4) If you upgrade or buy more equipment always notify your insurance carrier right away.

Common Mistakes:

1) Thinking your auto or home policy extends to your trailer for property coverage.

2) Having a policy that only covers you at the address listed on your policy.

3) Assuming contents not attached are covered with your coverage on the truck or trailer.

Insure My Food offers affordable insurance, made easy!  We cover insurance for food trailers, food trucks, and mobile food vendors. We offer a one-page quick quote form.  In addition, we created helpful blogs and resources just for you.  Joel brings over a decade of insurance experience in helping you determine your proper food trailer insurance coverage.

 

What type of insurance does a food trailer need? – Infographic

What type of insurance does a food trailer need? – Infographic

We get the question asked every day…What level of food trailer insurance coverage do I need?

Listen, we know food trailer insurance can sometimes be confusing, this is such a unique industry! You want to find a great price, but also make sure you are covered! We created this to help you visually understand what food trailer insurance you need in order to protect your business. Nobody has ever regretted reviewing their coverage levels when preparing for a possible claim. It is important to put the time into learning about food trailer insurance before it’s too late!

 

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General Liability Insurance

General liability protects you from lawsuits brought against you for injury or property damage to third parties. It does not cover auto related or employee injuries, those coverages are discussed below.

GL food trailer insurance coverage includes your products (food), your premise (slip and fall), personal injury/advertising injury (libel and slander), and property damage to others.

The best part about this insurance is it also covers the legal fees to defend such claims, even if it’s found you were not at fault!

It is smart to have this coverage since we live in a sue crazed world.  Also, it is often required to do business with most landlords, vendors, and commissary kitchens.

Common coverage limits in the industry are 1 million per occurrence, 2 million aggregate (total claims per year).

To read more about general liability for food trailers and food trucks see our blog post:

General Liability Insurance 101 for mobile food vendors

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Food Trailer and contents Property coverage (Inland Marine)

You pour countless hours and money into your food trailer, so you want to make sure your investment is protected!

Property coverage is otherwise known as inland marine (property that moves over land) coverage for your food trailer or other business equipment.

A common mistake we see is owners assuming your auto insurance policy automatically extends coverage to the vehicle pulling it.  Sadly, it doesn’t.

To read more about property insurance check out our other blogs:

What is the Value of My Food Truck or Food Trailer?

How to Protect Your Food Trailer or Food Truck Equipment

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Auto Liability

For vendors such as food trailers, concession trailers, food carts, pop-up vendors, street vendors, food stands, and catering trailers you will need to speak with your personal auto carrier on if you can keep that policy or if you will need a commercial auto policy.

Either way, you want to make sure you are covered for injury or property damage to others if you cause an accident while driving.

The auto liability applies once you attach the trailer and start moving. Once you park, detach and start operating your mobile food business, the general liability takes over.

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Workers Comp

Workers Compensation Insurance or worker’s comp as it is commonly known pays wage replacement and medical benefits to employees if they are injured. In many states, it’s required by law to carry workers comp and others optional.

To read more on workers comp insurance, check out our blog post:

The Disadvantages for Food Trailers that Don’t Have Workers Comp Insurance

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Additional Coverages

Other coverages are also available as add-ons.

For example, umbrella insurance is excess coverage above and beyond your limits of general liability or auto liability insurance. This coverage is often required by large contracts.

Food spoilage is another optional coverage that can pay for your spoiled food. However, beware that deductibles are often 500 or more, and many food trailers will hold about equal to the deductible.

One of the best additional coverages in my experience is the loss of business income due to an insurance loss.

Often times, even when you suffer a covered claim from an insurance loss, the resulting loss of income while you repair or replace your trailer.  It will at best be a big hit to your income, or more likely put you out of business.

About Insure My Food

Insure My Food provides insurance coverage for many types of mobile food vendors such food trailers, concession trailers, pop-up vendors, concessionaires, snow cone stands, and more.

We are committed to providing our clients the highest quality insurance service combine with our industry knowledge and experience.

We have the knowledge and insurance carrier partnerships to help make the insurance process affordable and easy!

To request an insurance quote click here or call us at (800) 985-7859