Insurance for Food Trucks

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Food Truck Insurance in Malaysia.

There were 167,490 food and beverage establishments in 2015, representing an annual growth rate of 5.1% since 2010. Thus, this article will be focusing on Insurance for Food Trucks. It is estimated in the year 2016, there are an estimated 70 modern food trucks in the Klang Valley alone, with an average of five food trucks opening each month.

With Gen Z expecting to form at least 60% of the workforce by 2020, the food services industry will be thriving with various store openings and innovative concepts. You will need a comprehensive insurance policy that protects from industry-specific risks and hazards.

Examples of scenario would be from an employee slipping on a wet kitchen floor to a customer falling ill due to food consumed at your restaurant or a natural disaster or fire forcing you to close shop temporarily, there are numerous risks inherent to the Food Services & Accommodation industry.

Food Services insurance policies come in handy if you own one of the following type of businesses.

  • Bar                                                                                                                                                                              
  • Nightclub                                                                                                                                                                  
  • Restaurant 
  • Café  
  • Food Truck        
  • Catering

How does Food Trucks and Insurance Connect?

As food trucks in Malaysia gain popularity among millennials, so does the growing number of small business owners.  

Many food trucks owners and drivers are homechefs-turned-mobile restaurant owners. Whilst it is certainly an innovative way to bring your business on the road, owning a food truck can be risky in more ways than one. For that, there is the immediate and obvious need for a special motor insurance policy.

Any food truck owner hoping to enter the business, and many who already do own trucks, should strongly consider the many insurance needs that exist within this industry which is often not stated.

To be comprehensively covered, food truck owners should purchase a variety of insurance products, as their risk profile is considered to be similar to conventional restaurants.

What type of policies should a food truck owner consider?

There are number of policies that should be covered by a food truck company:-

1) COMMERCIAL MOTOR INSURANCE

Majority of the time, food truck owners will opt for a basic commercial Motor Insurance under the title C-Permit. However, with the vehicle being their main source of income, it is important to note that the additional perils can be purchased at a minimal cost.

  • Compensation For Assessed Repair Time

Insurance companies define Compensation For Assessed Repair Time or more commonly known as CART, as the reasonable amount payable as compensation to you for loss of use of vehicle. Say your food truck was involved in an accident, and you have been determined as not at fault by the police report, you can claim for CART insurance.   

  • Inclusion Of Special Perils

By including special perils, your business vehicle will be covered in the event of damages caused by flood, typhoon, hurricane, storm, tempest, earthquake, volcanic eruption and landslide. Business owners can reduce their unexpected cost which amount to plenty of thousands of Ringgit.

  • Separate Item Fixed To Your Car

It is extremely important that food truck owners incorporate these additional perils to the commercial vehicle. By doing so, there will be cover for the additional items that was inserted into their vehicle such as tents as per picture below

2) ALL RISK INSURANCE

It is vital for business owners to purchase the All Risk Insurance in order to safeguard their equipment in the food truck. In the event of any mishaps done to the machinery equipment such as over-heating, and/or breakdown of equipment due to perils insured, the insurance policy can cover for the repair cost and replacement cost for new equipment.

By doing so, business owners can reduce the expenses incurred and improve the cash flow of their business.

3) PERSONAL ACCIDENT INSURANCE

Since food truck businesses operate in high-traffic areas, the probability of an incident occurring to their personal self is also considerably high.

For example, a chef might get his hand burn while cooking. Instead of purchasing an expensive medical policy, a personal accident policy is sufficient as the cost of purchasing the insurance is reasonable compared to personal medical insurance policy.

A Personal Accident Insurance policy usually covers for medical expenses up to RM5,000 and it is on pay and claim basis. However, based on previous claims history, a minor injury damage would not exceed RM3,000. Apart from that, there are also other benefits to a personal accident policy for food truck owners, such as:

  • Medical cover and Bereavement Allowance for death due to Dengue, Malaria, Japanese Encephalitis, Chikungunya or Zika
  • Ambulance fees
  • Personal liability 1.5 times of Principal Sum Insured
  • Renewal Bonus subject to No Claim up to 100% Of Sum Insured