The pandemic has hit every industry, more or less. But the maximum damage was probably suffered by the restaurant and hospitality sector, including food trucks.
With most of their customers, i.e., the regular officegoers and commuters, absent on the roads, they suffered a massive drop in their clientele. Almost half of the $985 million sector seemed to go out of business during the lockdown. Some of the food trucks changed their focus to essential workers and frontline COVID-19 warriors to keep going. Others also started campaigns to gather funds and support essential services during the crisis. Innovations crept in as mobile apps were launched to support these food trucks on the streets, as they moved from one hospital to another to deliver food supplies to the frontline workers. These apps helped the customer avoid long queues and order directly, thus helping the food truck business stay afloat.
As better times seem visible on the horizon, one thing on the menu for all food trucks is insurance. Auto insurance and other benefits help cover the expenses of accidents, legalities, and employee health and safety.
Let us look at why insurance is crucial for a food truck business.
Mobile business
Food trucking is a mobile business dependent on a vehicle. Hence, auto insurance is a necessity. Commercial auto insurance can protect your business from unfortunate incidents on the roads. Many food truck owners also opt for other coverage, like general liability insurance, to cover the expenses of unprecedented situations. On top of that, food trucks have appliances like cookers, heaters, and refrigerators that need protection while moving as well as while stationary.
Laws and business requisites
Every commercial vehicle on the roads needs insurance. It is the law and should be followed by everyone, be it a goods delivery truck or a food truck. Hence, if your food truck does not have, at least, commercial auto insurance, that may mean trouble. Further, the general liability insurance opens new opportunities for the business owners, as most commissary kitchens and other places require it.
Risk management
All small business owners should focus on growth and development more than anything else, and food trucks are not an exception. Insurance gives them the peace of mind to start new ventures and take the business forward. Every facet of their business should be protected from the risks of thefts and accidents. As the business is mobile, one may also need to protect others from accidental damages or injuries. Buying the right insurance can help food truck owners manage these risks and run the business seamlessly.
Employee protection
The employees are crucial to the business. During the pandemic, business owners realized the importance of employee health and safety like never before. Like all businesses, there’s little doubt that food trucks need to cover medical expenses regarding accidental injuries. The worker’s compensation insurance can help do that. On average, the cost of worker’s compensation insurance for food trucks is around $1,270 per year. But the protection it offers is much more in cases of severe injuries. Besides medical expenses, the insurance also pays for wage loss. Some custom insurance packages include business liability insurance as well. That also covers attorney’s fees for lawsuits filed against the company.
Now that you are aware of the available protection offered by insurance, let us summarize the types of insurance coverage you may need:
- Commercial auto liability insurance – It is the primary insurance coverage for a food truck to operate risk-free on the roads. Not only is it the law for mobile businesses, but also a social responsibility of the owner. In cases of accidental damage to other vehicles, insurance can cover the expenses.
- Commercial property insurance – It helps protect business assets and covers the costs of repairs or replacement regarding damages. As food trucks require several appliances to operate, this insurance is crucial.
- Collision and comprehensive coverage – If the food truck collides with another vehicle and suffers damages, the collision coverage pays for the repairs. On the other hand, the comprehensive coverage will pay for damages incurred by collision with other things, besides another vehicle.
- Worker’s compensation insurance – As mentioned, this insurance will give a food truck owner peace of mind regarding employee protection. Even the employees will feel safe and secure at work. A few insurance providers have also extended their policies to cover protection against COVID-19 in some states.
- General commercial liability – This cover can protect food truck owners in cases, e.g., when someone gets sick after eating the food. It pays for medical and legal expenses if the person blames the food truck.
People have always depended on food trucks for their day-to-day nourishment while at work. As habits change post-COVID, people may be reluctant to visit restaurants and other closed spaces for a while, and food trucks could benefit. Under the circumstances, food truck owners should focus on insurance to run their business without any issues. With insurance on the menu, there will be no looking back for the food trucks.