Starting a small business can be exciting, especially if you have decided to embark on your start-up journey with a food truck. Food truck insurance should cover all risks associated with this specialized industry. Because of the large variety of things that could happen with a food truck, it would be difficult to list every possibility. Still, the most common scenarios are injuries to customers, food poisoning, and your food truck itself being damaged or stolen. General liability, workers compensation, and business auto insurance are all available and could be necessary to run your business correctly in your state.
What Is Food Truck Insurance?
These days it feels like all the best food is available on a truck. According to TheZebra, many great chefs have created replicas of their restaurants on wheels and even more up-and-coming cooks are trying out their prowess on the road. Having a mobile kitchen might seem like an easier way to start a business than dropping capital on a permanent location; in reality, food trucks are subject to unique risks that business owners will have to contend with.
Food trucks are of all shapes and sizes, but the basic idea of a food truck is that it is a mobile business. Food trucks offer opportunities to operate in several locations and take advantage of optimal locations, such as festivals and large-scale events, because of the ease of transportation.
When looking at insurance, however, you should understand that you are both a business and a vehicle. So you’ll need to cover both. A food truck needs to be insured by multiple policies that all work together to protect your business.
What Type of Insurance Do You Need For a Food Truck
Food trucks have liabilities that are more than just traffic accidents. The most common issues will be covered under your general liability insurance, per FitSmallBusiness.
Your general liability policy will cover:
- Physical injury: If an employee or your food truck injures a customer
- Property damage: If your operation damages nearby buildings or vehicles
- Reputational harm: If someone claims you have violated copyright laws
- Food poisoning: If a customer claims your business was the source of their foodborne illnesses
Commercial Car Insurance
You will also need a commercial car insurance policy as the food truck is a business. Similar to a personal auto insurance policy, you’ll be covered for physical damage from a traffic accident and comprehensive damages like those caused by theft, vandalism, or weather.
Commercial Property Insurance
This insurance policy covers equipment like pots, pans, food, sales equipment, stoves, and utensils. Property insurance will cover anything you use for your business that isn’t attached to the vehicle from fire, floods, theft, and much more.
Your employees are not covered under your general liability insurance because they’re a member of business operations. Suppose an employee is injured while on the clock, workers’ compensation will pay for their medical expenses and any lost wages. This coverage is mandatory in most states and is integral in protecting your business from lawsuits filed by injured employees.
If you own the food truck itself and you don’t have a commercial auto policy, you may want to consider these additional coverages:
- Collision: This coverage pays for repairs to the vehicle after it collides with another care or static objects like a fence or tree.
- Comprehensive: Comprehensive coverage pays for repairs when the vehicle is damaged by weather, theft, or hitting an animal.
- Uninsured or underinsured motorist: You are covered with this insurance if you are in a traffic accident with another driver who does not have insurance, or their insurance is insufficient.
Who Sells Food Truck Insurance?
Most major insurance companies will provide commercial car insurance, but if you already have a personal policy, you should consider bundling your commercial policies with your personal account. Here are some of the best companies for food truck insurance.
- Liberty Mutual
- State Farm
How Much Does Food Truck Insurance Cost?
Food truck insurance can become costly because of the multiple types of insurance you need to have to operate the business properly. Many factors determine your rates, including:
- Location: If you sell food in high-crime areas or work primarily in high traffic areas like street fairs, your premiums could be higher.
- Property value: You will have to insure any property permanently attached to the vehicle. If your business equipment is costly, you’ll pay higher rates.
- Payroll: Workers’ compensation rates depend on payroll costs and how the employees do their job.
- Coverage limits: You can see cheaper rates by agreeing to lower insurance limits.
- Deductibles: By choosing to pay a higher deductible, your premium should decrease because you accept a higher degree of financial responsibility.
- Actual cash value: Your property insurance may cost extra if it does not take into account the depreciation of your equipment.
- Additional insureds: In some cases, you may need to add clients to your policy as additional insureds. Many companies won’t charge for this, but it isn’t uncommon to pay $100 per request.
Cost of a Commercial Car Insurance Policy
According to CoverWallet, you can expect to pay around $135 per month or $1620 a year for a food truck commercial car insurance policy. This policy covers theft and damage caused by weather and vandalism. It may also pay expenses for third-party injuries if your driver is held liable for a traffic accident.
Cost of a Business Owner’s Policy
Food truck owners typically pay $105 monthly or $1260 a year for their business owner insurance with a deductible of $1000.
Cost of General Liability Insurance
Premiums for general liability coverage are around $45 each month or $560 per year. This policy covers customer injuries and property damage with no deductible.
The cost of a workers’ compensation policy runs close to $105 monthly or $1270 annually for food trucks. The price of this policy can vary dramatically depending on your location and business operations.
With food trucks becoming more common over the years, major insurance companies have begun offering great rates for food trucks and other mobile restaurants. Quotes are usually free online. Head to your insurance provider’s website today and get a quote!
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