Food trucks make up a small but rapidlyexpanding segment of the restaurant market, producerssay. 

“The food-truck industry is growing tremendously,” says MarcioPepe, president of MPX Insurance Services in Aliso, Viejo, Calif.Pepe, who specializes in eateries, has seen his food-truck businessincrease steadily for several years. He estimates he placescoverage for 75 to 80 food truck owners, some of whom operate ahalf-dozen trucks.

Many food trucks are getting more sophisticated, Pepe adds. Moreowners are specializing in gourmet foods, so their trucks haveexpensive ovens, refrigerators, generators and sinks that have tobe insured. 

“The whole gourmet food-truck movement didn't even exist fiveyears ago,” says David Baker, a principal at Costa Mesa,Calif.-based Stratum Insurance Agency.  Stratum, whichplaces coverage in every state but Massachusetts, has clients whoown 300 to 400 food trucks, Baker notes.

The business is taking off particularly fast in San Francisco,Southern California, Florida, New York, New Jersey andPennsylvania, says Baker. 

Plus, with the construction industry improving, the food-truckbusiness looks increasingly promising, observes Steve R. Franke, avice president of contract underwriting in the West region atsurplus-lines carrier Scottsdale Insurance Co. 

TOUGH PLACEMENTS

Scottsdale will cover food trucks, but many insurers, especiallyadmitted markets, won't. Brokers say the admitted markets don'thave a good understanding of the risk, so they're unsure how torate it properly. 

Truck owners need General Liability and Commercial Autocoverage, and many also should carry Property insurance to covertheir kitchen equipment. In addition, food spoilage can be coveredunder Property for an additional premium.

Truck owners need Workers' Compensation insurance if they hireeven temporary help, says Pepe. When an owner hires help, Pepe alsorecommends Employer Practices Liability insurance.

Altogether, those coverages cost a minimum of $10,000, about a 6percent to 7 percent increase from a year ago, Pepe notes. However,few owner/operators purchase EPLI coverage, he says.

For General Liability, Auto and Property coverage, Baker saysStratum has access to a program, but he would not identify theinsurer for competitive reasons. The rates he's seeing? “Stable,”he says. 

To work some events, truck owners need up to $5 million ofGeneral Liability limits—far more than the $500,000 of limits theStratum program provides, Baker notes. In those cases, Stratum mustfind Umbrella or Excess coverage, he adds.