What do Cupcakes, BBQ and Ethnic Fusion Have In Common?
Does this trend mean opportunity for you?
To find out if the market is hopping where you are, just insert Food Truck and Your City into the search on Yelp. For more populated areas, you will find local directories available with maps of routes and detailed menus.
Food truck operators face many challenges, from permitting to parking. According John White, MBA Columnist at Inc. Magazine, insurance costs and challenges are sighted among the top business concerns of food truck operators.
His post on Dapper Doughnut outlined top challenges as follow:
- Challenging mobile vending laws
- Need for parking permits
- Health codes
- Rules about distances from other businesses
- Needing a commissary for food preparation
- Insurance costs and challenges
- Fire codes
- Rival food trucks
FoodTruckOperator.com has created this useful list for its readership to educate truck operators on what coverage to obtain. I’ve taken excerpts from it and hope that you will participate in critiquing this by answering the one question survey at the end of the list. I’m also hoping this list peaks your interest in pursuing a new business opportunity in your area!
Similar to brick and mortar, it’s important to protect you from your products (food), your premise (slip and fall), personal injury/advertising injury (libel and slander), and property damage to others. It’s often required by commissary kitchens as they will require you to list them as an additional insured on your policy.
Many states require food trucks to carry workers compensation – consider the potential injuries within a kitchen setting, adding mobility and cramped quarters.
Property damage insurance
Unlike brick and mortar, a food truck requires coverage of the truck, the attached equipment and all of the equipment not attached.
Truck or trailer coverage
Property coverage for the truck or trailer can come from comprehensive, collision and/or inland marine policies. These policies are designed to provide protection for your food truck and attached equipment (attached is defined to mean attached by bolt, plumbing or gas line). The coverage includes property damage losses due from a collision, vandalism, theft or other covered losses.
Contents coverage protects the items that are not attached to your food truck or food trailer. These are all the items that would fall if you flipped your truck upside down, or items not kept in the truck. Since auto policies do not cover equipment that is not attached (by bolt, plumbing or gas line) to the food truck or trailer, a separate coverage is needed to insure these items.
This often overlooked coverage can be added using inland marine insurance or property in transit coverage. The coverage includes property damage losses due from a collision, vandalism, theft or other covered losses.
The greatest risk for large liability claims do not come from the food you serve, but the truck you drive on the road. You want to make sure you are covered for injury or property damage to others if there is an accident while driving from spot to spot. It is important to remember that the auto liability applies once you start moving. Once you are parked and you open for business, your general liability coverage takes over.
Food spoilage is optional coverage that can pay for your spoiled food. Additional coverages is loss of business income due to an insurance loss. A lot of times, even when you suffer a covered claim from an insurance loss, the resulting loss of income while you repair or replace your food truck can quickly climb to the thousands. This could put you out of business without coverage for loss of business income. FoodTruckOperator.com
If you have anything to add to this, please take a moment to tell me and I’ll update this list to add your perspective. If we can make insurance less of a concern for food truck operators, they can spend more energy dreaming up great new ideas for our taste buds!