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May 26, 2020Small Business Insurance
July 8, 2020
Hosting food truck events is becoming an increasingly popular way to attract customers and promote businesses. It’s a strategy that may work well for craft breweries, for food and beer can be paired together in a myriad of combinations. Massachusetts craft breweries shouldn’t host food trucks without first checking their microbrewery insurance policies, though. Having food trucks come to a brewery can expose the brewery to potential risks, and it’s important to make sure a microbrewery policy will protect against these possible risks.
Having Food Trucks Craft Brewery Covered by Insurance
Craft Breweries Assume “Vicarious Liabilities” When Inviting Food Trucks
When craft breweries give food trucks permission to serve customers on their property, breweries frequently assume what’s known in the insurance industry as “vicarious liability.” Vicarious liability means that a brewery might be held responsible for the actions of a food truck that’s on the brewery’s property. Even though the two businesses are completely separate entities, the brewery might be asked to compensate any party that’s injured by the food truck.
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Accidents at food truck events are uncommon, but they do happen. And, they can be expensive when they do. For example, a food truck at an event might:
• Hit another vehicle or a person while parking at or leaving the event
• Serve improperly prepared food that makes customers sick
• Leak oil that causes someone to slip and fall
Even if the microbrewery hosting an event had no involvement in any of these scenarios, the microbrewery may be held vicariously liable and asked to compensate the affected people.
In short, inviting a food truck to a craft brewery is a lot like asking someone to come to a dinner party. The host might not be involved in their guest’s actions, but they can be embarrassed by their guest’s actions. In the case of a brewery, they can also be held responsible and sued.
Craft Breweries Have Two Ways to Protect Themselves:
Vicarious liability is a real risk that should be seriously considered before inviting food trucks to a craft brewery, but it doesn’t need to stop craft breweries from hosting food truck events. Craft breweries in Massachusetts have two ways to protect themselves from this risk.
First, craft breweries can require all food trucks that serve at brewery-sponsored events to carry liability insurance -- and to name the brewery as an additional insured party. Liability insurance helps protect businesses in covered situations where a business causes injury or property damage. Having a craft brewery listed as an additional insured party generally extends a policy’s liability protections to the brewery.
Should a brewery be held responsible for a covered accident a food truck caused, this measure may act as an initial defence. The policy might help pay for legal fees and settlements the brewery faces as a result of the incident.
Second, craft breweries ought to carry their own liability coverage, and their microbrewery insurance policy’s liability coverage should have high limits. It’s not uncommon for businesses to have $1 million, and sometimes even more, in liability protection.
A brewery’s own craft brewery insurance policy provides an additional layer of protection. Should a claim exceed the limits of a food truck’s policy (or a food truck provide a false certificate of insurance), a craft brewery insurance policy may cover the incident.
