What is Food Truck Insurance?
Food trucks have become an increasingly popular business model because they are not limited by a physical building and can easily travel to various locations and festivals to serve their specialties. This model offers a certain creative freedom that is not always possible in traditional restaurants.
However, with such freedom comes special risks. Therefore, food truck businesses in Arkansas need to have comprehensive insurance coverage to protect their interests in case of any unforeseen events.
How Does Food Truck Insurance Work?
Food truck insurance works by providing comprehensive insurance coverage for your mobile business in Arkansas. It safeguards against physical damages from collisions and offers liability protection. Understanding how this insurance works ensures your business stays protected on the road.
What Does Commercial Food Truck Insurance Cover in Arkansas?
Insurance for the Truck
Commercial food truck insurance in Arkansas is similar to traditional auto insurance policies. It covers physical damages caused by collisions, along with liability and comprehensive coverage. However, it's important to note that this insurance doesn't protect the internal contents of the truck.
Insurance for Equipment and Truck Contents
Typically, commercial property insurance provides coverage for business property such as point-of-sale equipment, pans, pots, stoves, and food. Any items that your business uses that are not directly part of the truck are protected with property insurance coverage from risks like vandalism, fire, theft, and weather-related events.
Liability Insurance
Commercial auto policies offer liability coverage, but this coverage only applies when the vehicle is in motion and covers damages caused by the driver. For example, if a pedestrian is hit by a driver.
On the other hand, commercial general liability insurance is separate from standard auto liability and protects the business during its operation. If a food truck business is sued by customers claiming they suffered food poisoning, commercial liability coverage would cover legal fees and representation costs, even if the lawsuit is lost.
Employee Insurance
It's important to note that general liability policies don't cover employees, as they are considered part of the business operation. This means that if an employee gets injured during work, their lost wages and medical expenses are covered under workers' compensation. Most employers are mandated to provide this coverage on a state level, and it's an essential safeguard against potential lawsuits for businesses.
Food Trailer Insurance
If you own a food trailer that is towed, your business needs to have an endorsement that extends the existing commercial auto insurance policy. Otherwise, the insurance policy will only cover the towing of the trailer. In case the trailer is damaged during a collision, the property damage will not be covered by the policy.
The coverage offered for the trailer depends on its weight, and it varies. It is always essential to verify with a professional insurance company to ensure you have the necessary coverage before investing in additional coverage.
What Our Customers Say
Factors That Affect Food Truck Insurance Premiums
Unfortunately, unlike a traditional restaurant whose kitchen is enclosed by a building, your food truck business is based on the truck moving through various locations. Because you're utilizing the truck for commercial purposes, it won't be covered under traditional auto insurance.
Therefore, you will need to invest in business auto insurance as part of the plan. This coverage helps to protect you in the case that the food truck gets into an accident. Life can throw the business into many crazy scenarios. For example, if you're parked out on a hot summer day in the sun, and a customer accidentally burns themselves when making contact with the vehicle. In another instance, a customer
could have gotten food poisoning. This could result in your business being held liable.
You always want to serve healthy, sanitary food to customers to prevent any potential for illness. This is why you would want to serve anything spoiled. There could also be a situation in which the power goes out, and all the food in the fridge spoils. Fortunately, there exists special coverage to add to the insurance plan for protection.
Spoilage insurance can help cover problems. Some policies even cover costs to fix issues relating to shutdowns.
Although a food truck is a unique way to run a business and house, it still demands certain basic coverages as part of the insurance policy. If there are employees, you will need to acquire workers' compensation insurance to help cover lost wages and expenses if they get injured while on the job.
Given the amount of expensive equipment required for food preparation, insurance for systems breakdown can help cover repair and replacement costs when things break.
Furthermore, as your business needs to travel to various locations, interruption insurance can cover lost income if you cannot operate your business, such as the result of a natural disaster.
What are the Most Common Food Truck Claims?
The breakdown for mechanical failure or equipment issues is one of the more common food truck insurance claims. This covers expenses necessary for the repair or replacement of equipment damages and protects income lost as a result of the breakdown.
Although commercial property insurance protects against external damages caused by fires, equipment breakdown insurance protects internal damages caused by power surges, mechanical breakdowns, operator error, and motor burnout.
How to Get Commercial Food Truck Insurance in Arkansas?
Given the increasing prevalence of food trucks, many insurance companies offer insurance for mobile businesses or even specialize in such a service. Major insurance companies offer numerous options for such eateries, as business and commercial insurance policies represent their primary portfolio.
Use G&G Insurance to compare rates. For the best prices, get a quote or call us today. Our specialists review your unique insurance requirements and recommend plans that protect your company and drivers.
