Just like any other business, food truck operations are susceptible to risk. Here are three risks to avoid.
Just like any other business, food truck operations are susceptible to risk. What does that mean? In short, it means there is a chance something unfortunate may happen to someone or something as a result of your business. Common examples of this include a customer getting sick or injured, property being damaged where your truck is operating, or equipment being damaged or stolen. This is just the unfortunate reality of owning a business, but luckily, there are steps you can take to protect your food truck.
What is food truck insurance?
Food truck businesses face unique challenges and therefore require unique insurance expertise. So, before we dive into the common risks food truck operators face, let’s define what food truck insurance is as it plays an important role in mitigating risks for your business. Ultimately, food truck insurance is a liability insurance plan designed specifically for operators in the industry. There are countless factors outside a business owner’s control that can lead to a number of risks costing thousands of dollars that without the right insurance, would come directly out of your pocket. Coverages in this type of plan include general and product liability coverage, as well as business personal property coverage. In short, think of food truck insurance as a safety net for your business.
3 common risks and how to avoid them
Property damage
One unique challenge to owning a food truck is that it is likely operating on a third-party’s property and property damage claims are a common risk. So, whether you accidentally damaged some landscaping or your truck stained the concrete, you could be liable to pay thousands of dollars in repair costs. However, you can take precautions to help limit these occurrences, such as:
- Ensure you have ample space surrounding your truck to avoid unwanted accidents.
- Make sure the area is free of obstructions or easily damages objects.
- Communicate openly with your property manager or owners to be aware of potential hazards as well as any concerns you may have.
Unfortunately, accidents do happen so it’s important to make sure your food truck is covered by your general liability policy. This can help offset or even eliminate any expenses that may arise from property damage claims.
Sick customer
Working in the food industry, there is an inherent risk of a customer getting sick as a result of running your food truck business. Whether it’s from food borne illness, poorly prepared or expired foods, or incorrectly labeled allergens, there are a number of ways a customer can fall ill. Regardless of how it happens, sickness claims are a serious risk that can not only affect your revenue, but also your reputation.
To avoid these claims, there are a few steps a food truck business can take to protect itself and its customers:
- Follow all health and safety regulations as dictated by your local governing bodies.
- Use fresh ingredients and never prepare or serve food past its expiration date.
- Properly label any potential allergens, such as daily, gluten, nuts and more.
In the case that a customer does get sick, it’s important to have a Product Liability Policy in place. These coverages are designed to protect businesses from the financial burden that arises when their product injures someone—including getting sick from the food you served them.
Theft or damage to equipment
Food trucks and the equipment required to run them can be expensive. This makes them a prime target for theft and is quite common in the industry. In a recent claims report released by the Food Liability Insurance Program (FLIP), 13% of client claims in 2023 were theft related.
The reality is, If someone steals or damages your equipment, it can cost tens of thousands of dollars to replace. This makes implementing security precautions imperative for business sustainability. Here are just a few to consider:
Security cameras that can monitor all sides of your truck.
Protection for external equipment — like generators —with cages welded to the truck.
Find a safe location to store your truck, such as gated lots or parking facilities designed to store larger vehicles.
In addition to taking some key security measures, having a food truck insurance plan that includes Business Personal Property or Inland Marine coverage is your best protection against costly claims. These policies are specifically designed to help business owners when their equipment is damaged or stolen.
Protect your food truck from risk
It’s important as a business owner to anticipate the potential risks associated with operating a food truck and take appropriate action to mitigate those risks. However, no one is immune to the challenges this industry brings and costly claims are likely to happen. By finding the right insurance partner, you can ensure that your business is set up for success and protected from common food truck risks.
