Insurance for Food Trucks

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How food trucks and insurance connect

As food trucks increase in popularity, so does the growing number of small business owners. Many food trucks owners and drivers are home chefs-turned-mobile restaurant owners. Many lack business school training and, more importantly, training in risk assessment. Owning a food truck can be risky in more ways than one. There is the immediate and obvious need for automobile insurance, although many current and potential food truck owners may not realize that a simple Personal Auto Insurance policy just won’t cut it.

Any food truck owner hoping to enter the business, and many who already do own trucks, should strongly consider the many insurance needs that exist within this industry.

Why does a food truck need insurance?

All food trucks need insurance because all food trucks exist within two separate areas: business vehicles and restaurants. All vehicles, no matter the type, need insurance coverage of some kind. Similarly, all restaurants carry a number of insurance products that help limit liability for several areas, including personal injury, bodily injury, food contamination, business interruption, fire damage and several other key areas. Questions any food truck owner should ask include:

  • What happens if someone gets sick after eating your food?
  • What laws and regulations exist if you decide you decide to serve alcohol?
  • What is your liability concern if someone is injured by your truck in some way, even while it is stationary?
  • What you fines might you face if you set up shop on a street corner, only to find out later that doing so was illegal?

What types of insurance does a food truck need?

For full liability coverage, food truck owners should purchase a variety of insurance products. It’s important for food truck owners to consider the similarities they share with a restaurant. This will help any owners skeptical of their liability to understand what risks are involved with food truck ownership.

Policies that food truck owners should consider include:

  • Commercial Auto Insurance A Commercial Vehicle Insurance policy will cover the higher weight limit common among this vehicle class.
  • General Liability Insurance This insurance policy covers client or customer-related liability concerns. This includes bodily injuries that occur around your food truck or damage to someone else’s property.
  • Business Interruption Insurance This policy covers situations where your business is no longer able to draw income due to a disaster of some kind. That could be a flood or a major accident that forces your truck off the road and into the shop for a long period of time.
  • Food Contamination Insurance Food truck owners, in particular, may need to worry about a customer suffering from either food poisoning or a food-born allergy. This insurance policy helps mitigate liability for this issue.
  • Workers Compensation Insurance You may be working alone, but if you do hire others it’s important to cover your business from workplace injury claims. This insurance will keep your business from having to shoulder full liability for an employee who was injured on the job.
  • Commercial Property Insurance A Commercial Vehicle Insurance policy will cover your vehicle, but not the equipment on the inside. Purchasing a Commercial Property Insurance policy will help insure the precious equipment necessary for your food truck business.
  • Food Service Vehicle Insurance (or similar policies) Many insurance providers offer packaged insurance products specifically for food trucks. This is because food trucks cross the boundary between commercial vehicle and restaurant. As such, these policies tend to cover a number of key areas important to food truck owners, such as bodily injury and property damage, business liability, employee dishonesty, and restaurant insurance. Purchasing this policy would preclude the need to purchase many of the above policies separately, as it operates as a cheaper, packaged policy.

Still not sure what you need?

Head on over to CoverWallet’s Insurance Checklist. There you’ll find a list of insurance types needed for your industry.

How much does food truck insurance cost?

Your food truck insurance costs will vary, depending on whether you purchase individual policies or a combined package. While there are various websites offering a combined policy for less than $400 each year, always check whether the level of coverage is appropriate before making a purchase. If your food truck is hit by another vehicle and requires significant repairs, would you be able to pay for repairing the truck and replacing equipment with just $50,000 in coverage?

According to Food Revolt, a typical combined policy covering the vehicle and General Liability may cost $3,000 per year, and you can find various examples online of cases where it runs between $5,000-$10,000 as the number of employees increases.

What type of insurance does this industry need?

Policy What is it? Why get it Popularity in your industry Want free quotes?
Commercial Auto
Commercial Auto insurance provides coverages such as liability, collision, comprehensive, medical payments and uninsured motorist coverage. Any vehicle on the road must be insured, and any incidents that occur while a vehicle is being used for business purposes may not be covered by a personal auto policy. That's why it is so important to make sure you have Commercial Auto insurance for any vehicles owned by the business.

What is it: Commercial Auto insurance provides coverages such as liability, collision, comprehensive, medical payments and uninsured motorist coverage.

Why get it: Any vehicle on the road must be insured, and any incidents that occur while a vehicle is being used for business purposes may not be covered by a personal auto policy. That's why it is so important to make sure you have Commercial Auto insurance for any vehicles owned by the business.

General Liability
This policy protects your business in case of third party claims, such as bodily injury or property damage. For example, the common "slip-and-fall" claim would be covered by your General Liability policy. General Liability insurance is often considered to be the core coverage, particularly for businesses that regularly physically interact with customers or sell physical goods. In addition, many businesses have a contract, like a loan or a lease, requiring that they have this coverage.

What is it: This policy protects your business in case of third party claims, such as bodily injury or property damage. For example, the common "slip-and-fall" claim would be covered by your General Liability policy.

Why get it: General Liability insurance is often considered to be the core coverage, particularly for businesses that regularly physically interact with customers or sell physical goods. In addition, many businesses have a contract, like a loan or a lease, requiring that they have this coverage.

Commercial Property
This policy protects the business's physical assets and is appropriate whether you own or lease your space. Keep in mind that this policy will only offer protection in the case of covered events. If you need protection for certain scenarios, such as floods or earthquakes, you may need additional coverage. If you have a mortgage or a lease, you may be required to have property insurance. Even if you are not, this is the best way to protect the building you are in and the business property you have in case of a natural disaster or some other accident.

What is it: This policy protects the business's physical assets and is appropriate whether you own or lease your space. Keep in mind that this policy will only offer protection in the case of covered events. If you need protection for certain scenarios, such as floods or earthquakes, you may need additional coverage.

Why get it: If you have a mortgage or a lease, you may be required to have property insurance. Even if you are not, this is the best way to protect the building you are in and the business property you have in case of a natural disaster or some other accident.

Workers Compensation
Workers Compensation covers an employee's lost wages and the cost of resulting medical treatment if they suffer a work-related injury or disease. It also covers services needed to help the employee recover and return to work. Workers Compensation coverage is mandatory in most states. The number of employees after which it's required differs by state, but you will generally need coverage once you have employees.

What is it: Workers Compensation covers an employee's lost wages and the cost of resulting medical treatment if they suffer a work-related injury or disease. It also covers services needed to help the employee recover and return to work.

Why get it: Workers Compensation coverage is mandatory in most states. The number of employees after which it's required differs by state, but you will generally need coverage once you have employees.

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