Understand What’s Covering Your Business

Unlike a traditional business with a storefront, a food truck doesn’t remain in the same location day after day. This means that every city and every venue can bring new risks to your business. Fortunately, you can insure against property losses with the right insurance coverage.

In this next installment of our Food Truck 101 Owner’s Insurance Guide, we’re going to focus on commercial business property insurance, to protect the things you use every day to keep your business cooking.

How does commercial business property protect my business?

Property coverage typically deals with covered losses to buildings, fixtures, and equipment. For mobile food truck businesses, there are additional property exposures associated with your equipment and business personal property in your truck or trailer that also need to be covered. This includes kitchen equipment, generators, food, and other miscellaneous items.

Business property provides you with coverage for damages, stolen or lost property, as well as the property of others that is in your care and includes:

• The kitchen equipment on your truck
• Computers, cash registers, and other items used to run your business
• Property/business space you own or lease to run your operation (a commercial kitchen)

While the most common property claims for food truck owners are kitchen fires and equipment breakdowns, business personal property (depending on your policy) can also include coverage for business assets damaged or destroyed in the event of natural disasters, theft and vandalism. However, you need to keep in mind that:

Property insurance is not meant to cover your actual food truck

If your kitchen equipment is damaged in a traffic collision, it will be covered under a property or inland marine policy – not your auto policy

If you store business equipment for your food truck at your home, inform your agent so that it’s adequately covered. Business property stored at your home isn’t typically covered under your homeowner’s policy if it’s used for business purposes

In order to have coverage for your property when you’re parked and serving customers, you must have “owned premises” coverage. This coverage can also protect your truck in the event it is burglarized while it’s parked overnight.

Property coverage options

Just about any basic property policy can be customized to meet the specific needs of your food truck business for an additional cost. Ask your agent about:

Equipment Breakdown – Covers your equipment in and on the vehicle – same as what’s needed for restaurants located in a building. This means your equipment will be replaced if mechanical failures or an electrical surge cause damage.

Food Spoilage – Compensates you for lost income as a result of food contamination, food spoilage, or loss of product due to power outages or refrigeration breakdowns. It can also compensate you for the cost of replacing lost food itself.

Business interruption – Covers the income that you would lose in the event you are involved in a significant accident or fire and unable to operate your food truck business until the required repairs and/or restorations are completed.

What’s inland marine and what does it cover?

Inland marine insurance offers protection for your business assets that are moveable or involved in transport. In relation to a food truck operation, inland marine coverage would protect your equipment and inventory when it’s on the move from one location to another – the key difference between your standard business property coverage. So if you’re in an accident while driving to your next location and your stove is damaged, you’d be covered under inland marine. However, it’s important to note that once you’re parked, you inland marine policy stops protecting you.

If you’re not sure whether or not your business has assets that should be protected by inland marine insurance, check with your agent. In most cases this coverage is often included in (or can be added to) a standard property policy.

Getting back to business – yesterday

As a business owner, every day that you have to wait to replace damaged or stolen equipment, restock your inventory, or get back into an operable space is revenue that’s lost. Coverage for your business property means having the peace of mind that you can replace what you need quickly, with fewer speed bumps in the road to slow you down.