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CalAttorney2
CalAttorney2, Attorney
Category: Legal
Satisfied Customers: 10244
Experience:  Civil litigation attorney for individuals and businesses.
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I want to rent out my Food cart to those who want to try out

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I want to rent out my Food cart to those who want to try out the food business. What steps or contracts are required to protect myself from liability if any and to protect the rented property. While I am aware that there are tons of regulations regarding food handling and permits to operate in food concession, I would like to confirm that those are no longer my concern as a renter of equipment (the cart). I am only renting out the cart and nothing else. Is it safe to assume that food vending permits and all other health code related tasks are not my concern since I am not the one conducting food sales?

* The cart has its own license plate and registration

William B. Esq. :

Dear Customer, thank you for choosing Just Answer. I would like to assist you today.

William B. Esq. :

Generally, these types of relationships are governed by the lease agreement. The lease will include a release of liability (include both a release and indemnity agreement - the indemnity agreement will require them to pay for your attorney in the event you are sued), and require that they carry insurance to an amount that satisfies you.

William B. Esq. :

If the party is leasing the cart, they should be required to take all responsibility for licensing the food business (just like leasing restaurant space (in fact a restaurant lease agreement may make a good template for you to use).

Customer:

The food business we operated is closed and is no longer operating. So I am a bit unclear on how they would be licensing the "food business". Is there a specific insurance that we should request (auto insurance or other?)

Customer:

How much insurance would be reasonable?

William B. Esq. :

I cannot give you specific legal advice or instruction on how to operate your business (we cannot practice law through the website), but the licensing is usually done by the individual or entity operating the business. Unless you intend to allow the individual to operate your business, they should be operating their own business using their own licensing (otherwise you will be ultimately liable for this regulatory issue, and you cannot assign that). As far as insurance you will need liability insurance for the vehicle, as well as general business liability insurance for any potential liability arising from injuries associated with the business (burns, illness from food borne pathogens, etc. - I know it is far fetched, but it is something to consider). To calculate your insurance needs you need to speak with an insurance agent. Remember, you are not purchasing the insurance, your renter is purchasing the policy and putting you on it as an "additional insured".

Customer:

Got it. I think I may misunderstood your initial response. So to confirm, the renter will take all responsibility for licensing "their" food business. Is that correct? I just want to separate myself from issues related to operating a food business, since all I plan to do is rent out the equipment

Customer:

so it sounds like I should look at a restaraunt lease agreement and speak to an insurance agent

William B. Esq. :

That is correct, you are leasing equipment, they are operating a business.

Customer:

and so if they have harmful business practices, I am likely not liable since I am just renting equipment

Customer:

so just to reiterate my understanding of the insurance..

Customer:

If they haul the cart away and it seperates from their truck and hits another vehicle, the insurance they purchased plays into affect in what way?

William B. Esq. :

That is correct. The insurance gives you additional protection and ensures that you have litigation counsel in the event that you are sued. Having insurance policies are simply that - insurance in the event of something going wrong unexpectedly.

William B. Esq. :

Speaking with an insurance agent is the best way to make sure you have the right type of policy. (make sure you have the "defense" and "indemnity" parts).

Customer:

perfect..thank you

William B. Esq. :

You are welcome. I wish you the best of luck in this venture.

Customer:

i just had a lot of misconceptions about insurance after looking at crowdshared vehicle companies

Customer:

thanks again

William B. Esq. :

Insurance is a tricky issue, you can forego it if you like, the risk may be minimal, I am a civil litigation attorney and look at things from that perspective. If you can place the burden of insurance on your renter, it can be a significant asset, but it depends on how much your renter is willing to take on.

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