One type of insurance that has grown significantly over the last decade is for food truck businesses. If you run a food truck in NC or are thinking about starting up a business in the industry, then you will have several insurance policy coverages to consider.
We have various carriers that specialize in these policy types and we can offer the most competitive rates in the market. We will discuss some of the most common policy types that you will want to protect you and allow you to complete contracts.
Auto liability on a food truck is similar to a personal auto insurance policy and it will pay out in situations where you are involved in an incident while driving your food truck. If you hit a vehicle, person, or other object, your auto liability policy will pay for the bodily injury or property damage of the injured party. You can also include comprehensive and collision coverage, medical payments, etc along with your auto liability policy as you would your personal auto policy.
Auto liability limits chosen maybe be split limits like $100,000/300,000/50,000 or combined single limits of $1,000,000. The limits you choose will want to meet your minimum threshold to protect yourself and the limits being required by a contract.
A general liability policy will pay out for losses outside of negligence while driving your vehicle. This could include claims of illness from the food that you serve or an individual being injured around your truck.
Typical limits for a general liability are $1,000,000 per occurrence. This is a common requirement if you plan to sell food in a public place.
Business Personal Property
Any business property that you use to serve, prepare, and deliver food should also be covered if you want protection for losses from fire, theft, or other losses. Your auto liability will likely have a cap on any of these items, even if they are permanently attached to the vehicle. Business personal property can included grills, coolers, products, and cash registers.
If you hire employees in your business, then you will also want to make sure that you have a worker compensation policy in effect. If your employees are injured in a workplace accident you can be sued not only for their injuries, but for their lost time at work.
There are laws in place that require workers comp coverage for your employees. In NC the minimum required limits for workers compensation is $100,000 each employee, $100,000 each accident, and $500,000 for the policy limit. You can increase these limits up to $1,000,000 for a nominal price increase.
If you serve alcohol, you will want to carry a liquor liability policy. These policies payout on claims that result from injuries caused by intoxicated patrons served by your establishment.
Aside from protecting yourself from catastrophic claims and being sued for losses, you will likely encounter a need for insurance due to contract requirements. NC counties, especially Mecklenburg County, have stringent insurance requirements for food trucks and vendors. In order to meet their requirements, you will need to prove that you have the minimum requirements by presenting an insurance certificate. It is not uncommon to see requests for insurance from other entities like building owners, landlords, restaurants, and festivals.
Some final thoughts on compiling food truck insurance quotes.
It is important to understand that you don’t need to combine all policy coverage types under one policy or carrier. In some cases, bundling these coverages under one policy can be beneficial. In others, it can cost you more. You have to understand that sometimes insurance companies may offer you a lower rate on one coverage type, say auto liability, but make up for it by charging a higher premium on another policy type, say collision.
It is best to let an experienced insurance agent peruse all of the companies at hand and possibly piecemeal these coverages together if it makes more financial sense for you.
Also, it is best to be prepared and present the needed information when getting quotes so you won’t have to go back and forth with the agent.
Below are some of the questions you may be asked when requesting quotes.
- Vehicle info including VIN numbers
- Driver info including date of births and license numbers
- Total annual sales
- Total annual payroll
- Liability limits
- Specific contract requirements
- Mailing and garaging address
Please let us know if you have any other questions regarding insurance for food trucks and trailers. Our expert agents are here to help.
A contract bond is a type of surety bond that helps guarantee that the terms of a contract are met. If a contractor does not adhere to the terms of the contract than the injured party can collect any financial losses incurred from the bonding company. It is an additional safeguard to ensure the principal performs all items in a written contract.
A contract bond is often times synonymous with the following terms:
- Contractor Bond
- Construction Bond
- Bid Performance Bond
- Bid Bond
- Proposal Bond
- Payment Bonds
The two common types of contract bonds are bid bonds and performance or payment bonds.
Bid Bonds specifically protect the obligee from the Principal either backing off of the stated bid that has been accepted or submitting a low-ball bid and then not honoring the agreed upon price. Bid bonds are typically issued between 5-10% of the overall bid.
Performance Bonds will protect the obligee in areas of the contract like completing a job when agreed upon and under the agreed upon items. It guarantees that the contractor will perform the contract and pay for the labor and materials needed to complete the project. Payment bonds are typically issued at 100% of the contract amount.
A surety bond is an agreement that involves three of the following parties:
- The Principal– The party purchasing the bond that is being required to fulfill the terms of the agreement.
- The Obligee– The party that is usually requiring the bond and is reimbursed for financial losses due to the principal’s failure to fulfill the duties of the contract.
- The Surety– The party that is responsible for paying out the financial losses of the obligee due to the prinicipal’s failure to fulfill the duties of the contract.
Contract bonds are usually only required on larger projects by large builders or subcontractors. It is a way to easily recover from financial burdens without having to enter into costly lawsuits against the contractor. Typically any public project over $100,000 will require a a contract bond.
A list of common business types that will be required to have these bonds are:
- Concrete construction
- General contractors
- HVAC contractors
Due to the nature of these bonds and high possible payouts, most companies will run a credit score on the principal before agreeing to issue a bond. In addition to this, some companies may require the following other items to consider a risk.
- Financial statements for the business
- Personal financial statement for the owner
- Resume of owner
- Certificates of insurance on other commercial policies the principal may have
- Bank letter of reference
- Job reference letters
- Schedule of current projects on hand
Our agency writes through various bonding companies, as we do insurance companies. Preferred risks will see the best pricing in the industry with a couple of our carriers, but we also have other markets that may not be considered by the preferred companies for one reason or another. Please call us at 704-494-9495 for any questions you may have on this surety bond type or to get a quote today.
Cyber liability insurance is one of the fastest growing insurance policies that NC small businesses are looking to protect themselves with. Because it is such a new policy type, there are several questions on what it is and what it covers. We will discuss exactly those things in this article so that you can make an educated decision if this policy is right for your North Carolina small business.
Everyone knows how much cyber is a growing concern, but it might surprise some businesses just how common it is. It is far from being a concern for only large corporations too. In fact 60% of cyber crimes are against small businesses. 60% of those businesses that are victims of these attacks go out of business within 6 months of the attack. The costs are staggering when they do occur and those without cyber insurance are left with 100% of those costs.
Are you exposed to the possibility of this happening to your business?
If your company has/does have any of the following, then the answer is a resounding yes.
- Company Website
- Social Media Accounts (Facebook, Twitter, Instagram, Linked In)
- Accept Credit Cards
- Uses Online Banking
- Store Customer Data (Name, Address, Date of Birth, License Numbers, Credit Card Info, Social Security Numbers)
If you realize that you could be at risk, but are still confused on what types of things could happen to you, then you are not alone. It can be very complicated. We will discuss and clear up some of those common claim types below and explain the ways that a cyber policy will help cover those things.
Social engineering is a predatory type of cyber crime where an employee is tricked into sending or uploading money to someone through false pretenses.
Cyber insurance will cover those lost funds from these types of schemes.
This is a virus sent as a link in an e-mail. Once an employee clicks the link, the virus immediately begins to to encrypt computer files. The imposter will then demand funds in order to recover the company’s files. Typically bit coins will be demanded.
The cyber liability policy will cover the cost of the ransom in order to have your files recovered.
This type of attack gains the most media attention. Large organizations like Sony, Target, and Equifax have recently been in the news for being hacked. These losses occur when a cyber criminal breaches a company network and gains access to customer data.
Cyber policies will typically cover the following:
1. Fines by regulatory commissions and other penalties
2. Legal fees toward lawsuits from customers
3. Security expert assessments
4. Public relations firm services
5. Customer notification costs for those effected by the breach
Covers defamation or slander by an employee about a customer on social medial accounts causing a lawsuit.
Cyber insurance will cover defense in a lawsuit against your company.
FUNDS TRANSFER FRAUD
Hackers gain access to your system and transfer company funds to their account.
Your cyber policy will cover any losses incurred, not covered by your bank for fraudulent transfers.
Your company site gets hacked making your system inoperable and not allowing customers access to their information.
Cyber insurance will cover lawsuits by customers for not being able to access their account.
One final myth we would like to dispel regarding cyber liability insurance, and that is that the premiums are too expensive for a small business. We write through some of the leading insurance companies in the industry, with the most competitive premiums. Premiums start as low as $800 per year depending on the business type, size, and exposure.
Please call us at 704-494-9495 with any questions, or if you would like a quote on this valuable insurance policy today.
A workers compensation audit is an inevitable part of all workers compensation policies. While many other commercial insurance policies may require them as well, it is not always done in every case. These policy types can include commercial general liability, commercial property, commercial auto, professional liability, etc. With a workers compensation policy, you can count on an audit being done for each policy term.
A lot of our clients may feel overwhelmed by these audits at first. However, after completing their first audit, they become less daunting in the future. The purpose of these audits is to accurately assess the correct premium based on the actual payroll versus the payroll that was estimated at the beginning of the policy term.
Quite simply, if you overestimate your payroll, then you will receive a refund. If you underestimate your payroll, then you will receive an additional premium bill. Coming up with an estimated payroll, in almost every industry, is really just a best guess. There are several factors that may cause your payroll to go up or down.
Some of the factors that may cause payroll to change are:
- Terminating an employee
- Hiring an employee
- A rise or fall in business causing payroll to change
- Hiring an uninsured subcontractor
- Hiring an employee or sub outside of your normal class code
- Work that changes depending on the season or the weather
In addition to assessing the correct payroll, the workers compensation company will want to confirm that the correct class code is chosen for that business. Class codes are the best description given to the actual work being done by that business. For some businesses, the actual class code is easy to determine. For others, it can be a little more tricky and the insurance company will have to accurately assess the risk based on the day to day work being done.
In some cases, one business may have several class codes. This is seen very often with construction companies where they may have painters, electricians, concrete construction, tiling, plumbing, HVAC, roofing,etc. Businesses with multiple class codes will want to separate their payroll based on these different classes or they will likely face their total payroll being lumped into the most expensive classification.
Class codes can range in scope from very expensive to extremely inexpensive. One of the lowest and most inexpensive class codes is clerical office employees. One of the most expensive classes is for roofers. The reason for this discrepancy is due to the risk level involved in each line of work. Not only will these rates be determined due to the chances of an accident, but also the severity of the accident. The more severe the accident, the more that worker will need more money to pay for medical bills and the longer he/she will be out of work.
Their are certain records will you need to produce to show the proper documentation in completing your audit.
Some of the items you will be asked to present to complete an audit may include the following:
- Form 1040 Tax Return(this is for sole proprietorships)
- Schedule C (this shows the profit or loss breakdown of expenses on your tax return)
- Schedule SE (Self Employment Tax)
- Schedule K1 (Shareholder’s Share of Income)
- Form 1120 (US Corporate Income Tax Return)
- 941 Reports (Quarterly Federal Payroll Tax Reports)
- 940 Reports (Employer’s Annual Unemployment Return)
- 1099 Forms (Subcontractor Pay)
- Receipt Books
You should know what payroll will be picked up on your premium audit.
Who will be included in my payroll?
1. Anyone that you paid as a W2 employee will be counted as payroll.
2. Any 1099 subcontractor that your business paid that you did not receive their workers comp certificate of insurance from.
3. Owners that have not rejected coverage as either owners, officers, members, etc where allowed by law.
Every state has different workers compensation laws and you will need to discuss with an insurance professional the laws within your state. You will also need to confirm if your workers compensation policy in the state where your business resides will cover you while doing work in another state. For instance, in NC, a policy purchased here will not cover even 1 employee that would be doing work in FL. Not even temporarily. It is very important that you discuss this with an agent before beginning work in another state. The penalty for not doing so can result in large fines from the state or you being responsible for paying out in the event of a claim if it is denied by your insurance company.
In closing, don’t let the workers comp audit scare you. As long as you maintain accurate records, you will be fine. We strongly urge our clients to not let any 1099 subcontractors do any work for you, without first getting a copy of their own workers compensation certificate. An audit can actually be a good thing. For a lot of our clients, they see a refund at the end of their audit term. This is a welcome surprise and it is a much better feeling then being hit with a large additional premium because you didn’t adequately plan or keep accurate and ongoing records.
If you have any further questions on this subject or on workers compensation policies in general, please feel free to give one of our friendly commercial agents a call at 704-494-9495.
If you are looking for truck insurance for your business vehicle from a local insurance agency near you that can help you find the best rates and coverage, than read on to see if we can help. Dealing with a local agency that you can sit face to face, if you so choose, can be very helpful when you are dealing the complications of commercial auto insurance. Commercial trucks can include any of the following types of businesses:
- Dump Truck Insurance
- General Freight Hauler Insurance
- Auto Hauler Insurance
- Contractor Insurance
- Public Transportation Insurance
- Tow Truck Insurance
- Non-Emergency Medical Insurance
If you own a business similar to one of the ones listed above, then you will likely have either a Federal or State of NC requirement to be able to acquire and keep a commercial tag. Even if you don’t have those requirements, then you may have requirements from a contract that requires the same or higher limits as those required by the Federal Motor Carrier Safety Administration (FMCSA) or the state of NC.
What Types of Coverage Do you Need?
This question will vary depending on your business type, the requirements of the State of NC and Federal Government.
- Liability Limits: You will have some limit of liability required, depending on several factors. These limits can range from $30,000/60,000/25,000 up to $5,000,000 combined single limits. The amount of coverage required can depend on your vehicle, radius, what you are hauling, gross vehicle weight, and if you are crossing state lines to name a few.
- Cargo Liability: This covers the commodity that you are hauling and can vary a great degree depending on the contract requirements and the Federal or State of NC requirements.
- Physical Damage: This covers the value of the vehicle you are driving, and the coverage required will depend either on your comfort with losing the value of your vehicle in the event of a loss or the bank requirements of the bank you are financing the vehicle through.
- On Hook: This covers the vehicle you are hauling in towing insurance risks. The value of the coverage chosen should be minimally, the highest value of the vehicle you would ever tow.
- General Liabilty: This covers your negligence outside of hitting someone with your vehicle or damage to the items you are hauling.
- Umbrella: An umbrella or excess liability policy will cover above and beyond where your underlying policy limits leave off. You want this policy in place to protect yourself further or to satisfy a contract..
- Workers Compensation: This covers your legal liability for your employees or subcontractors and may even be required by a contract even if you don’t have employees.
Commercial truck insurance takes on a whole new level of responsibility than your personal auto insurance. You may want to consider consulting an agent that is near you, to help you with local State of NC laws and help you determine what coverage will best suit you for these requirements. Outside of government responsibilities, you will likely encounter contract requirements that a veteran agent and agency can help you navigate. You will also want an independent agency that can help you get quotes from multiple carriers. Please contact us at 704-494-9495 if you have any questions or would like a shopped quote from the top insurance companies in your industry.