Need Insurance advice

[Fat Freddy]

What I thought would be a simple procedure has turned into a big headache today and more confusion than answers.

I have a 27ft camper that has been stripped out and made into a vending trailer. I did all the things required and a bit beyond to get approved by health dept, which was done and got my license Friday afternoon. Only things I got docked on was not having a no smoking sign and paint in one small spot I missed.

Hoping to take baby steps to get going and yet be organized I thought my next logical step would be insurance for liability just to protect myself.

The insurance place I have my home and auto through seemed very confused as to what I need. I tried to explain that I need liabilty in case someone gets sick. They said something like " we can cover your camper if in an accident but nothing if someone gets sick and now that it is not a camper I dont think we can cover it"

So I went to a Farm Bureau insurance in town I lived in. Talked to the main insurance guy there and he wasnt sure what I needed especially for liability but said he could cover the trailer.

So I then called a State Farm in a bigger town and explained what I was wanting. She said what I needed was a commercial policy to cover everything and it should be a million dollar policy and would be around $350 a month or so. WTH!!!!!! $350 a month?????

So my question to those that know a whole lot more than me. What kind of insurance should I be asking for? What financial coverage should I need? Any idea what a reasonable monthly cost should be expected?

I have a 27ft camper/vending trailer. I will be using it for an occasional vending at local events but mainly for catering. The farmers market in our town and ball games is what I am looking at vending at. Being considered a mobile food unit I have to move every 3 days but I actually plan on being parked back at home every night.

 

[bizznessman]

Insurance. :evil: :wink: A necessary Evil.

Here are a few links that may help you out.

LINK

LINK

LINK

Basically you are looking at needing the following types of insurance for the type of operation you are considering.

Property Insurance- This insurance will cover your cart or stand and all of the equipment and supplies within it. You can choose basic insurance, which will cover weather damage and acts of God, or broad form, which will allow coverage for riots or civil commotion, good when vending in areas that are near sports arenas or in areas where there are a lot of bars.
Commercial Car Insurance- If you have a trailer, you will need to purchase this insurance, as it is federal regulation for all transportation vehicles to have insurance on them.
Liability Insurance- This will cover you in case a customer is injured on your property. The liability becomes slightly more nebulous with mobile carts and kiosks, but it is a good idea to have coverage in case someone claims they were hurt on your premises.

Property Insurance- This insurance will cover your cart or stand and all of the equipment and supplies within it. You can choose basic insurance, which will cover weather damage and acts of God, or broad form, which will allow coverage for riots or civil commotion, good when vending in areas that are near sports arenas or in areas where there are a lot of bars.

Commercial Car Insurance- If you have a trailer, you will need to purchase this insurance, as it is federal regulation for all transportation vehicles to have insurance on them. (grrrrrrrrr)

Liability Insurance- This will cover you in case a customer is injured on your property. The liability becomes slightly more nebulous with mobile carts and kiosks, but it is a good idea to have coverage in case someone claims they were hurt on your premises.

We ran into the same thing you did when querying insurance companies that deal primarily in personal property policies such as home/auto coverage. They just don't have the knowledge of the specialty policies involved with food businesses.

Some folks have been using FLIP LINK . We have never used them so we can't give a review but they might be a place for you to start. If you do an internet search for "food vending liability insurance" you will find a lot of information on various companies that specialize in these types of policies.

As for the $350/month quote. This is just a guess on my part but that premium could be a combination of the Prop/Comm Vehicle/Liability coverages. If this is the case it is not really that far off from the industry average. Most people never think about their vehicle/trailer needing commercial coverage or their businesses personal property (smoker, wares, etc) needing to be covered. They usually only think about the liability coverage and assume that is all they need.

 

[HBMTN]

That is way more than I pay. My liability with vehicle full coverage excluding workers comp and liquor liability is $1750 per year and I have a $1 mil/2mil policy through Nationwide Insurance.

 

[bizznessman]

Hmmmmm....seems my earlier post copy/paste doubled up on the paste. Sorry about that.

 

[Fat Freddy]

Hmmmmm....seems my earlier post copy/paste doubled up on the paste. Sorry about that.

Was great for me..Emphasized certain points :thumb:

 

[IamMadMan]

Also if you are not filed for a limited liability incorporation, you may wish to do so. If you run the business without being a LLC you could lose all your assets including your home and pension if someone sues you.

The LLC allows them only to seize the assets of the corporation, and not your personal assets.

 

[bizznessman]

Also if you are not filed for a limited liability incorporation, you may wish to do so. If you run the business without being a LLC you could lose all your assets including your home and pension if someone sues you.

The LLC allows them only to seize the assets of the corporation, and not your personal assets.

Great point IamMadMan. We use an LLC for our business entity. Here is a link that lays them out for comparison.

LINK

I know, you're saying, "this is WAY more than I wanted to know". But you may find it helpful or someone else reading the posts may...so here we go.

Basically there are 4 choices. Listed in order of asset protection characteristics.

Sole Proprietor - You are on your own. :biggrin1: ALL of your personal assets are at risk if something goes dreadfully wrong. All of your "business" income is "your income" and is reported as your personal income and taxed accordingly.

Partnership - You are on your own as a group and as individuals. :biggrin1: All of each of the partners assets are at risk if something goes dreadfully wrong. All of the "business" incomes/expenses are split according to the partnership agreement and "each partners income/expenses" are reported as their personal income/expenses and handled at tax time accordingly.

LLC (Limited Liability Company) - Your personal assets are fairly stongly protected and separate from the LLC. The structure/governance is sort of a mix of a sole proprietorship/partnership but organized more along the lines of a corporation but with much less legal paperwork and personal assets are not attachable for the debts/judgements against the LLC. Also you get to choose how taxation is to be handled, as individual/partnership/corporate style processes. LLC's are not bullet proof. If things are not handled correctly in the business they can be pierced and then the individuals assets can be at risk.

Corporation - Complete separation of personal assets from the Corporation because here you are actually creating an entity (fictional person) in the eyes of the law. The income is corporate income and the tax rates are much higher bracket. There is much more onus on paperwork/regulations with this entity. Normally a corporation is only needed for larger businesses or ones that require some of the specific legal characteristics inherent to a full fledged corporation.

S-Corp - Asset protection is virtually the same as the Corporation. It is very similar in structure/governance to a Corporation. But, there are very nice tax advantages offered by the S-Corp. The tax benefits are what have fueled the rise of the S-Corp. NOTE: We almost went with one but instead formed an LLC. We may switch it over to an S-Corp at some point for tax reasons.

Okay, now let's smoke some meat!!!! :mrgreen:

 

[early mornin' smokin']

business insurance on a mobile rig, you're looking at easily $2500+ a year. Call any local business insurance specialist. Get some prices, then shop around. You'll find they're pretty much all the same.

 

[Jeff Therrell]

Call an independent Insurance company, the major companys don't carry this insurance. They are buying it from another company and marking it up and selling it to you.

 

[JimmyDAL]

Has anybody tried FLIP? Good? Bad?