In the past decade, you may have noticed the rise of food trucks and trailers in your local metropolitan area. They are often present at festivals, mall parking lots, and university campuses. As the national economy began to decline in 2008, restaurateurs sought less expensive ways to bring their food to the masses. This, combined with advertising through social media, helped to bring about the explosion of the mobile food business. But, do they have the right food trailer insurance?
If you are one of the many entrepreneurs who have decided to get into this fast-growing business, then you have probably considered the risks. Owning a food trailer creates a unique set of challenges that need to be insured.
Food Truck vs. Food Trailer
There are differences between owning a food truck and a food trailer. A food truck is a vehicle and kitchen all in one, whereas a food trailer is a kitchen mounted onto a trailer which needs to be towed by a truck. Usually, this is a truck that the food trailer operator owns personally. Since it is generally cheaper to own a food trailer, many seeking a lower cost of entry into this popular and fast-growing industry choose this as their option.
A food trailer may be used as a “restaurant on wheels” or as a part-time venture for carnivals, sporting events, and parades. You may prefer to treat your food trailer as a concession stand or food-vending cart to serve your customers the fair favorites like elephant ears, donuts, hot dogs, and soda.
Either way, you need to have an insurance plan in place to cover you when the unexpected happens. There are several options available on the marketplace today.
Auto Insurance Coverage
You might assume that your current auto insurance policy will be enough to protect both your vehicle and food trailer. After all, the trailer is attached to your truck while in use. However, you would be mistaken. If you get into an accident, most auto insurance policies will only cover your vehicle and not the trailer.
Your food trailer is a part of your business operations, and most auto insurance coverage is not for business uses. You could purchase a business endorsement for your auto policy, but this still would not include liability or property coverage.
Food Trailer Insurance
The best way to ensure that all potential risks associated with your food trailer business are protected is through a separate food trailer insurance policy. There are four aspects of coverage that you need to consider, including:
Commercial Auto Insurance: Your food trailer is your business and therefore needs to be protected as one. Other trailers, like boat and cargo, may only be used for personal use and therefore have different coverage purposes. With commercial auto insurance, both your vehicle and trailer are protected if you have an accident. It includes coverage for physical damages to your vehicle and trailer, bodily injury, medical payments, and uninsured/underinsured motorist liability.
General Liability: Accidents don’t just happen while the vehicle and trailer are in transit, and these potential scenarios need to be protected as well. General liability coverage will protect you against food-related claims, as well as bodily injury and property damage while the trailer is in a stationary position. This could be through vandalism, theft, or everyday business operations.
Property Insurance: Owning a food trailer is not only a business venture, but a way of life. If something were to happen to the trailer, it could be devastating. Property insurance will protect the equipment you tow within your trailer, like the oven, refrigerator, griddle, and blender. If you have a mechanical breakdown and cannot carry out your operations, this coverage will protect you against loss of business income and the equipment that is no longer in service.
Off-Premise Insurance: More than likely, you plan to sell food at a location that you do not own. Food trailers are mobile and are exposed to risks that general property insurance will not cover. This type of insurance will protect your equipment while you are in transit, in use at another location, or in storage.
The costs for insuring your food trailer vary based on your state of residence, the states you plan to travel to with your food trailer, the type of food trailer you own, and the value of that trailer. It also depends upon the amount of coverage you prefer per accident, for each person’s medical payments, for the cost of your kitchen equipment, and so on.
Insuremyfoodtrailer.net provides an example of the monthly insurance cost based on a California-owned food trailer valued at $25,000. Purchasing commercial auto insurance, general liability, and property insurance all together would cost $175 per month. Only having general liability coverage and property insurance is $65 per month. If you only want general liability insurance, it would cost $35 per month.
Speak with an Agent
Of course, it is recommended that you insure against all possible risks associated with owning and utilizing a food trailer. Speaking with an independent insurance agent who has experience in the industry will help you to make the right decision for your insurance needs.
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