Workers' Compensation Guide for Food Trucks

Catering food trucks have a unique insurance coverage exposure that most insurance carriers do not want to insure. Workers’ Compensation is one of the most important insurance coverages that a food truck owner must purchase for his or her employees. Workers’ Compensation is administered on a state-by-state basis and is required in most states to replace wages and medical benefits for employees that were injured on the job or in the course of employment.

As an owner/officer of your business, you can choose to be included or excluded in your Workers’ Compensation policy. However, you must provide coverage for all part-time and full-time employees. If you have a 1099 Independent Contractor Employee, the contractor must purchase their own Workers’ Compensation insurance which must be included in their contract requirements. Most food truck employees do not qualify as a 1099 employee, but consult your attorney or accountant to clarify. Miscoding an employee as an independent contractor can lead to penalties for non-Workers’ Compensation coverage and non-paid payroll taxes. Failing to provide Workers’ Compensation insurance in most states is a criminal offense that can lead to expensive fines and or imprisonment. California employers can study this site for further information: http://www.dir.ca.gov/dwc/faqs.html. Employers in states outside of California can turn to their official state’s website.

Workers’ Compensation premiums are calculated by the class code rate (per $100 of payroll) and the amount of gross wages paid to the employee. As a business owner, you must provide an estimated annual wage amount at the beginning of a policy. At the end of a policy, an audit will be performed to determine the actual premium due based on actual wages paid. In order to perform this audit, a business owner is required to provide names of the partners and ownerships, their employees’ names, titles, job duties, actual gross wages and quarterly IRS 941 reports for all four quarters during the coverage period. All employees on the policy must be on payroll and reported on the 941 report.

Paychex provides payroll and human resources services to food trucks that need assistance in calculating, paying and filing payroll taxes. Paychex works with CateringTruckInsurance.com to prepare 941 quarterly reports to carriers and monitor Workers’ Compensation premiums throughout a policy. CateringTruckInsurance.com has developed a strong relationship with payroll consultant Grace Ogata from Paychex, Inc. Grace has experience in working with food trucks and is ready to help you.

Grace Ogata - Paychex Consultant

Phone (626) 551-8634 Email: gogata@paychex.com

What Is Mobile Business Income and Why Isn't Everyone Talking About It?

Mobile Business Income is one of the most important, but least discussed or known insurance coverage. Business Income is a standard coverage on a brick and mortar restaurant, but often not available for a mobile food truck business.

You may ask, what does Mobile Business Income cover? Let's give a real life example...while driving through a parking lot you hit a building concrete awning and heavily damage the top half of your truck. Now your Auto Liability will pay to fix the building damage you caused and Auto Collision coverage will fix your truck. However, it will take 30-60 days to fix. That means you will not be on the road selling for 30-60 days. Meanwhile you still owe the bank truck payments along with any other bills. This is where Mobile Business Income will get triggered upon an auto claim. Mobile Business Income will supplement the income you are losing for not being on the road. Please be aware, coverage is only triggered for a covered claim. Therefore, a blown tire, engine trouble, etc. would not be considered a covered claim.

The likelihood of a business shutting down after a major loss is greater if they do not have Business Income coverage. So unless you have emergency savings or are prepared to shut down, this is a coverage you can not operate without. If anything, it will help sustain your business and help you sleep at night.

At CateringTruckInsurance.com we can offer this unique and critical insurance coverage. Coverage is provide in 30-60-90 day increments and provide $100-$1,000 a day in coverage. You select how many months and the amount of coverage needed. Mobile Business Income can only be purchased when you have your General Liability and Auto coverage with Lexington (AIG). Coverage is currently offered in 25+ states (other states pending). We insure over 100+ food trucks across the country and are the first to offer this coverage.