Starting a food truck business is an exciting but complex venture, even for an established restaurant. It will pay off to prepare yourself for potential accidents that might occur related to driving the truck and working in food service, among other risks. Here’s everything you need to know about getting food truck insurance.
How Does Food Truck Insurance Work?
Food truck insurance is a type of small business insurance that technically could include many different coverage types and benefits. It depends on what the business needs. Common insurance needs might include liability coverage if customers get sick or coverage for property damage or employee injury. The following are just a few examples of businesses, or parts of a business that might need food truck insurance:
- Ice cream trucks
- Food trucks
- Lunch trucks
- Catering businesses with vehicles
- Concession stand businesses with vehicles
- Vending and snack trucks
Anyone who needs to insure a food truck and related activities will need this type of coverage, and most major providers offer it under their small business insurance category.
What Are the Types of Food Truck Insurance?
There are three types of food truck insurance you’ll find out there. Depending on the state, you almost always need two of them, while the third might be optional.
The first type is commercial car insurance. This is somewhat like standard minimum liability car insurance coverage for a personal vehicle. It protects your company against at-fault expenses from injuries or property damage involving the truck. It also covers expenses for replacing damaged equipment, plus other potential business liability concerns, like being found guilty of copyright abuse. It also includes coverage for other collisions, weather, vandalism, and theft, making it kind of a combination of comprehensive and collision insurance plus liability.
The second type of food truck insurance you’ll probably be required to get is general liability coverage. This covers you if any food truck activities lead to a problem you are found liable for, such as a customer getting sick, getting burned by food that is too hot, and other situations, depending on the business. General liability insurance can cover other things that might come up as well, like damage to a venue you rented while operating your food truck.
Finally, you might want or need to get workers’ compensation coverage. Businesses that are a one-man show wouldn’t need this, but if you have employees and are running a busy operation, this is a very beneficial type of insurance that protects employees who get hurt or sick while at work. This helps you make these situations right without using company funds.
How Much Does Food Truck Insurance Cost?
It’s hard to give definite numbers when it comes to small business insurance costs because different industries and businesses will have greater or smaller insurance needs or risk levels. How many types of insurance you’re buying and how thorough you are with choosing coverage will also have a big impact on your monthly premium. Here are a few factors that might lead to more expensive food truck insurance:
- Trucks that cook food: Operating grills, fryers, and powered cookware is a fire risk, making your truck a riskier insurance prospect than one that serves only prepackaged goods. An ice cream truck would be at lower risk than a barbecue or taco truck.
- Trucks with more expensive equipment: Whether it’s part of the truck itself or the equipment used inside it, having more expensive equipment in your food truck means that you’re likely to need more money to replace anything that is lost or damaged.
- Trucks doing business in high-traffic or high-crime areas: If your truck will mostly conduct business in locations with higher rates of crime, traffic accidents, and other issues, providers will usually charge more for insurance.
How to Get Affordable Food Truck Insurance
Some types of insurance are mandatory, but how much you pay could vary a lot. If you want to get better premiums on food truck insurance and save money every year, the most useful thing you can do is shop around. Every provider in your area will have its own specialties and ways of calculating premiums or fees. Once you get a clear idea about how much and what types of coverage you need, you can compare quotes from different companies and choose what works the best.
Once a year, you may want to look at other options or adjust your policy as your business continues to change. This way, you aren’t paying for coverage that isn’t relevant. Try to only pay for insurance that reflects the risks that your food truck business might face.
What Are Some Food Truck Insurance Providers?
For the most part, you can expect any insurance company with small business and liability coverage to be able to handle all the food truck insurance you might need. Some examples of major providers are:
State Farm agents are small-business owners themselves, and their small business insurance services are highly rated. They offer simple, effective liability plans for $1 million or more to a huge variety of small businesses, so nearly any kind of food truck should qualify.
Nationwide divides its small business insurance into different industry categories, including food and beverage. Coverage isn’t available in Alaska or Hawaii yet, but Nationwide is generally well-known for having good equipment breakdown and workers’ compensation policy packages.
This is one of the oldest insurance providers in the United States and currently the second-largest provider of commercial property insurance. It has good ratings for workers’ compensation and commercial auto insurance packages. Their prices are highly dependent on the industry you work in and the way your business operates. You may be able to get a good deal with Travelers if you can prove that your business is safely run and faces minimal risk.
These are just a few examples of providers that can get you a sufficient food truck insurance package. Remember to shop around to find a deal that covers your business. You’ll be able to hit the road and serve up something delicious, all with peace of mind that your business, truck, and employees are protected.
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