The Basics of Food Truck Insurance

Do you own a food truck business? Food trucks are all the rage right now, from a business owner’s perspective as well as a consumer's. Food trucks can be a great business with less overhead than a restaurant with the added benefit of being able to go where the customers are.

However, because of how unique your business is, you must make sure you hold the right insurance coverage to protect you, your food truck business, and the vehicle you operate out of. You may be questioning if you need insurance on a food truck—the short answer is yes. But what do you need? How much does it cost? Keep reading to learn more.

What Should Be Included in a Food Truck Insurance Policy?

Familiarizing yourself with some basic business insurance coverages can help you understand the process and help you make choices that can protect your business on wheels. What insurance should you get?

• Commercial Auto Insurance: Food truck operators need to get commercial auto insurance. The right commercial auto policy will include collision coverage and comprehensive coverage if you get in an accident and cause physical damage to your car (and someone else's). If you cause property damage, commercial auto policies can help cover the cost to repair or replace someone's property. Commercial auto coverage not only covers food trucks but also includes any permanently attached equipment that helps your business run.
• Inland Marine Insurance: The right food truck insurance should also include inland marine insurance. This covers any business equipment contained within your food truck that is not permanently attached. Deep fryers, ovens, grills, and other products or goods within the vehicle will be protected from property damage if there's an accident or a fire. Make sure it includes coverage for business personal property. Mobile food businesses are especially at risk of losing expensive equipment because of the odds of an accident.
• General Liability Insurance: Also called “slip and fall” insurance, general liability insurance protects food truck owners if a third party is injured or their property is damaged. If a customer suffers bodily injury because they were served hot food, the personal injury can be covered under this policy. Food-related illnesses can also fall under general liability coverage. For example, if a customer sues your business and claims they contracted food poisoning from your product, your insurance company will step in. They can provide you with a lawyer, cover legal fees, and pay any necessary settlements. This is the policy that you would use for covering legal costs and medical expenses. This insurance can cover the most common food truck claims.
• Business Owners' Policy: A Business Owners Policy (BOP) is a business insurance policy that combines general liability insurance, business property insurance, and business interruption insurance—typically at a discounted rate. Sometimes other endorsements can be included. Many insurance companies offer this coverage, so check with your agent to see if your mobile food business qualifies for a BOP. If you opt to go with a BOP, make sure it has comprehensive business personal property coverage. Learn whether or not they'll offer coverage options at replacement cost or actual cash value. The right coverage can save you and your mobile business a lot of money.
• Workers' Compensation Insurance: If you hire employees to work in your mobile food truck, you need workers’ compensation insurance. It is required by law in most states. Workers' compensation will cover medical costs and help cover lost wages if one of your employees becomes ill or gets injured while working in your food truck.

Additional Coverage to Consider

Food truck owners can also consider these other coverages:

• Product Liability Insurance: Because you own a restaurant on wheels and you’re serving food products to your customers you'll want to consider a more comprehensive product liability insurance than what's offered by general liability. You're responsible for everything you pass through your service window, right? While general liability insurance has some coverage for illness-related claims, consider product liability insurance if that coverage is not sufficient. For example, if you run a sushi truck, you may fall into a “high-risk” category and require more extensive coverage than general liability can offer. The last thing you want is a low-limit policy that won't completely cover a food-related claim.
• Equipment Breakdown Insurance: If you own and use expensive equipment that would be costly to repair or replace if it breaks down, you'll want to consider equipment breakdown insurance. Some insurance carriers may include it with a general liability policy or inland marine insurance.
• Commercial Umbrella Insurance: Expanding your business doesn’t just mean offering new menu items or gaining access to a new venue—it can also mean that you should consider upping your food truck insurance coverage limits. Commercial umbrella insurance is designed to cover damages when they exceed the limits of your other policies.

What Types of Food Trucks are Covered?

Other than your stereotypical mobile food trucks, here are some other food trucks/food trailers that should get this coverage:

• Ice cream trucks
• Concession trucks
• Cupcake trucks
• Catering trucks
• Lunch trucks

Other food vendors or businesses may qualify for coverage, which is why we recommend speaking to an agent to determine the best route for your business.

If you own a food trailer, the tow vehicle must be covered under a commercial auto insurance policy. Because that coverage does not usually extend to trailers, you’ll need to have a specific endorsement written into your policy to cover comprehensive and collision while the trailer is being towed. 

How Much Does Food Truck Insurance Cost?

Putting together food truck insurance that covers the basics as well as your individual needs is paramount to future success. As a food truck owner, your budget, your goals, and your risks are all pertinent—so be prepared to answer questions about your annual income and other specifics when you discuss food truck insurance with insurance companies. What else might influence the cost of insurance for food trucks?

• The food truck coverage and policy limit you choose per year
• The type of food/products that you sell in your food truck
• Whether or not you own multiple food trucks/businesses
• Your annual gross sales
• The value of equipment/business property that you need covered
• How long you’ve been a food truck owner
• The type of food trucks you own (i.e. truck or trailer) 

The Food Liability Insurance Program (FLIP) offers general liability policies starting at $299 annually. Bu most food truck insurance policies insurance rates average between $300-$800 per year but it varies depending on the options chosen and factors above. Many businesses don't obtain the necessary coverage to protect their business properly. For more information, connect with an insurance agent to find out the proper coverages you should get.

Why Food Truck Insurance Is Essential

Operating a food truck can be an exciting and rewarding business opportunity, but it also comes with risks. To protect your investment and give you peace of mind, having comprehensive insurance coverage is crucial.

Food truck insurance is essential because it protects your business from financial loss in the case of unexpected events. A typical policy includes three types of insurance coverage.

Liability Protection

Accidents that involve your business operations could make you liable for financial damages. Liability coverage protects you against third-party injuries, property damage, or legal expenses resulting from lawsuits.

Property Coverage

Property coverage for food trucks safeguards your vehicle, equipment, and inventory against damage, theft, or vandalism. Food truck owners can potentially lose hundreds of thousands of dollars without coverage.

Business Interruption Coverage

If an unforeseen event forces you to temporarily suspend operations, food truck insurance can provide coverage for lost income during the downtime.  

What's Not Covered by Food Truck Insurance

Food truck insurance has limitations and exclusions that are important to consider. Common exclusions may include employee injuries, intentional acts, product recall, and damage to a business' reputation. Additionally, general liability coverage may not extend to medical bills caused by your food products.

Get a Free Food Truck Insurance Quote

A food truck is a great opportunity and the correct insurance can help make it possible for your business to enjoy a long, healthy life. It’s important to find an insurance agent who understands the particulars of food truck insurance, whether your operation is brand new, or just undergoing changes. 

Call us today at 877-907-5267 to speak with one of our insurance specialists about your food truck business insurance needs. Or you can complete the form above to start the process of getting quick, free, competitive quotes for the best coverage.

Reviewed By: Sarah Reid, Licensed Agent

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