How to Recover from an Employee Injury or Key Person Death in a Food Truck Operation
Last week, Mobile Cuisine Magazine covered the death of New Jersey food truck owner Jose Goncalves. This was tragic news for the food truck industry. Being in the insurance industry, we are more aware than the general public about food truck claims such as this. This topic has prompted me to discuss the importance of Key Person Insurance and Workers’ Compensation for a food truck business.
In this particular story, Jose’s wife will have a difficult time continuing the business by herself. Key Person Insurance would help sustain and continue operations despite the loss of her husband. Even with him gone, there will still be outstanding business liabilities. There are four categories of loss for which key person insurance can provide compensation (source – Wikipedia):
- Losses related to the extended period when a key person is unable to work, to provide temporary personnel and, if necessary to finance the recruitment and training of a replacement.
- Insurance to protect profits. For example, offsetting lost income from lost sales, losses resulting from the delay or cancellation of any business project that the key person was involved in, loss of opportunity to expand, loss of specialized skills or knowledge.
- Insurance to protect shareholders or partnership interests. Typically this is insurance to enable shareholdings or partnership interests to be purchased by existing shareholders or partners.
- Insurance for anyone involved in guaranteeing business loans or banking facilities. The value of insurance coverage is arranged to equal the value of the guarantee.
Now just imagine if the person killed in this particular accident was an employee. Too often we hear about food truck operators ignoring the state requirement (see your particular state laws) of Workers’ Compensation. A death or substantial injury to an employee could bring your food truck business to a screeching halt without Workers’ Compensation. Your business is directly responsible for the employee’s medical bills and other liabilities that result from an accident. The business is also subject to state fines and penalties for not having this coverage in place. All those months invested into building the truck, perfecting the menu, creating a website and Twittering…all in order to create a line of eager patrons is now gone in an instant.
Some food truck operators think that this type of thing could never happen to them. Yes, Workers’ Compensation or Key Person Insurance isn’t cheap, but it is worth spending the money to protect your business, lifestyle and family. Please contact me if you would like to discuss options or catering truck insurance quotes.
Matt Carlson, CIC is an insurance broker that specializes in insurance and risk management solutions for food and catering trucks. He is a foodie and second generation commercial insurance broker. He provides his clients with General Liability, Auto and Workers’ Compensation coverage. Matt currently insures over 25 food trucks. Some of his more notable clients are Krazy BBQ, Kogi BBQ and The Fox Pizza Bus. You can find his insurance website at http://www.cateringtruckinsurance.com where you can get more information on his company or an insurance quote application.