What Insurance Do You Need for a Food Truck?
Last Updated on February 15, 2022
Running a food truck can be lucrative. However, you need the right food truck insurance.
If you drive a mobile food truck, catering truck, ice cream truck, or similar vehicle, then you need special insurance. Basic food truck coverage includes commercial auto insurance (to protect the food truck) and general liability insurance (to protect your business against financial liabilities from accidents).
Keep reading to discover everything you need to know about food truck insurance and how it works.
Table of Contents:
- How Food Truck Insurance Works
- What You Need for Food Truck Insurance
- Who Needs Food Truck Insurance?
- How Food Trailer Insurance Works
- Where to Buy Food Truck Insurance
- How Much Does Food Truck Insurance Cost?
- Factors that Impact the Cost of Food Truck Insurance
How Food Truck Insurance Works
When you drive a food truck, you’re driving a vehicle and operating a small business at the same time. It sounds like insurance could be complicated – but it’s not.
Instead, your food truck business operates like any small business with a vehicle. You need insurance for the vehicle and liability insurance for your business.
If you have employees, then you may also need workers’ compensation insurance.
Some insurers offer special food truck insurance packages. Progressive, for example, offers specific food truck insurance through its commercial insurance division. Most major insurers also offer business owners policies (BOPs) that combine multiple coverages into a single convenient policy.
What You Need for Food Truck Insurance
If you want to insure a food truck, then you need the following minimum coverage options:
Commercial Auto Insurance: Commercial auto insurance protects your food truck and any trailers. It includes liability insurance (for any damages or injuries you cause when driving your food truck around). It also includes optional physical damage to your coverage (via comprehensive and collision coverage). If you have physical damage coverage, then this coverage also covers any appliances and equipment that are permanently attached to your food truck. Liability insurance is required in most states, while physical damage coverage is optional. However, most food truck owners carry both as part of a full coverage commercial auto insurance policy.
General Liability Insurance: General liability insurance protects your small business against damages or injuries you may cause to customers. If you feed someone contaminated food, for example, or burn them with hot food, then you may be liable for damages. With general liability insurance, your business is protected against financial liabilities resulting from accidents for which you’re legally liable.
Workers’ Compensation Coverage (Optional): If you have employees, you probably need workers’ compensation coverage. It protects employees who become injured or ill while at work.
Commercial Property Insurance (Optional): None of the insurance coverages above protect business property that is not permanently attached to your food truck – like pots, pans, stoves, point of sale systems, and other equipment. If your food truck is stolen or catches on fire, then you need commercial property insurance to receive compensation for all of these items. If you flipped over your food truck, then commercial property insurance would cover everything that fell out of the vehicle.
You may be able to combine multiple policies into a single business owners policy (BOP). Business owners policies include general liability and business property coverage.
Who Needs Food Truck Insurance?
Businesses that commonly need food truck insurance include:
- Mobile food trucks
- Lunch trucks
- Catering trucks
- Concession trucks
- Ice cream trucks
- Other vending and food service trucks
How Food Trailer Insurance Works
If you have a food trailer, then you require similar insurance to food trucks listed above. You are using your vehicle for commercial purposes (to tow the food trailer). You are also serving food and running a small business, which is why you need commercial liability insurance.
Because it’s a food trailer, you need an endorsement on your commercial auto insurance policy. This endorsement covers the towed trailer for comprehensive and collision coverage. It covers damage your trailer causes to other people and property. It also covers damage to the trailer itself.
Insurers insure trailers differently based on weight. For food trailers weighing more than 2,000lbs, you may need a special insurance policy. For trailers weighing less than 2,000lbs, you may be able to add an extra endorsement to your ordinary commercial auto insurance policy.
Where to Buy Food Truck Insurance
Food trucks are more popular than ever. Most major insurers offer special food truck insurance packages.
In fact, if you already have a personal auto insurance policy, then you may be able to easily add food truck insurance to your policy. Contact your insurer and ask about adding commercial liability insurance and commercial auto insurance to your policy.
Some of the major insurers offering food truck insurance bundles or products include:
By bundling food truck insurance with your existing personal auto insurance policy, you could save money.
How Much Does Food Truck Insurance Cost?
The cost of food truck insurance varies based on many factors. Insurance is all about risk, and insurers consider many things before assigning a premium.
Generally, it costs $100 to $300 per month to insure a food truck, including:
- Roughly $178 per month for a business owner’s policy (which includes coverage for commercial liability and commercial vehicles)
- Roughly $41 per month for general liability insurance
- Roughly $80 per month for workers’ compensation insurance
- Roughly $144 per month for a commercial auto insurance policy
To calculate premiums, insurers consider the types of foods you sell, the value of your truck and your equipment, and your driving history, among other factors.
Food trucks that serve prepackaged foods (like ice cream bars), for example, tend to have lower risk than food trucks serving grilled or fried foods. Grills and fryers increase risk for your business.
Similarly, food trucks with $50,000 of attached equipment cost more to insure than food trucks with a $1,000 ice cream freezer.
Request a quote online today to determine how much your food truck insurance may cost. All major insurers offer free online quote request forms that make it easy to compare rates.
Factors that Impact the Cost of Food Truck Insurance
Some of the factors that impact the cost of food truck insurance include:
Business Location: Insurers may ask for your ZIP code before calculating food truck insurance rates. If you park your food truck in an unsafe neighborhood every night, or if you work in dangerous areas, then you’ll pay higher insurance than someone working in safer areas.
Property Value: Insurance protects your food truck, the contents of your food truck, and other business property. The higher this property value is, the more you’ll pay for insurance.
Employee Wages and Roles: The more you pay your employees, the higher your workers’ compensation premiums will be. Workers’ compensation premiums also vary based on the roles workers perform.
Coverage Limits: Some food truck owners buy the minimum required liability insurance. Others splurge on high coverage limits. The more coverage you buy, the more you’ll pay for insurance.
Deductibles: The higher your deductible is, the lower your insurance premiums will be. You pay your deductible each time you file a claim.
Replacement Cost Versus Actual Cash Value: Replacement cost policies cost more because the insurance is paying to replace each item without depreciation. Actual cash value policies replace your possessions based on their declining value from depreciation.
Adding Additional Insured: If you work street fairs, corporate events, or festivals, then you may need to add other parties as additional insured on your policy. This can increase costs.
Insurers consider all of these factors before assigning rates. Based on your higher or lower risk, you could pay more or less than average for food truck insurance.
Final Word – Food Truck Insurance
Running a food truck is exciting, but you need the right insurance.
Most food truck owners carry business property insurance, general liability insurance, commercial auto insurance, and workers’ compensation insurance. Others buy a single business owners policy that combines general liability and business property coverage at a lower rate.
Shop around with different providers today to ensure you have the right food truck insurance.
