How to Buy the Right Food Truck Insurance

Posted by Damian Roberti on

So do you want to start a food truck business but not really sure about how much insurance or even what type of insurance you need?

Well in this video I'm going to give you a full tutorial about food truck insurance and the types of insurance coverage you may need.

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Food Truck Insurance Cost

The average cost of food truck insurance is approximately $3,000 - $5,000 a year but could vary depending on the coverage option you choose and your provider.

So we are going to dive into the average breakdown for the cost of a food truck insurance policy.

General Liability Insurance: $400 - $900 Premium Cost (for $1,000,000 Coverage and $0 Deductible)

Commercial Auto Insurance: $1,700 - $2,800 Premium Cost (for $250,000 Coverage and $500 Deductible)

Contents Insurance: $300 - $1,000 Premium Cost (for $25,000 Coverage and $500 Deductible)

Workers’ Compensation Insurance: $1,000 - $1,500 Premium Cost (for $1,000,000 Coverage and $0 Deductible)

So how are food truck insurance policies created what determines how much you pay?

The Insurance Company itself ( many companies offer the same coverage BUT the rates can vary dramatically )

The Size of the Food Truck Business ( employees
Your State-Specific policies

Certain cities and even crime rates within those cities

What are Your Food trucks Risk factors (cooking equipment are higher risk than refrigeration)

Value of equipment (the higher the price of the equipment, the higher the rate)

Replacement cost coverage versus cash value coverage

Employee’s Pay

overall amount of coverage (minimal, average, high)

what are the deductible options available for your food truck business

what kind of insurance policy is actually needed for a food truck business?

So the type of food truck you're actually going to buy is extremely important when you consider the type of insurance coverage you're going to get make sure to cover liabilities Collision theft and the actual protection of your food truck business itself.

So here are some of the types of insurances that are necessary in order for food truck catering trucks or any type of truck that serves food with potentially need as an insurance policy

Number 1. General Liability Insurance

A general liability insurance policy is needed to protect your food truck mobile business from accidents that could involve a third party when your truck is parked in operating as a business

Liability coverage insurance

lawsuits that happened due to a product that is either causing a foodborne illness potential food poisoning a product may be too hot any potential metal or glass I could cause a cut for a customer and potential food allergens when a customer buys your product and has a reaction.

There's even the potential of lawsuit for libel slander or even marketing advertising that either may be intentional or potentially unintentional those need additional coverage as well.

Lawsuits from potential property damage due to your truck or to someone else's building when you're parking and I'll bring your business you'll need also insurance for those incidences as well.



Any legal representation in the cases of lawsuits your insurance policy may not cover your attorneys fees

Does Not Cover:
potential situations related to one of your employees.
accidents that get involved with your food truck potentially while driving on the highway or streets
Incidents while your truck is driving from location to location

When you're working with a commissary kitchen potential landlords or even a vendor many of them require a minimum of general liability of a million-dollar policy in order to even do business with them.

And they'll also need to be listed as an additional insured on your policy itself.

Number 2. Auto Insurance ( Commercial Policy)

Also an additional policy of commercial auto insurance is required for vehicles that basically transport product that's related to the business ie; your food truck

The policies included in commercial auto insurance protect your vehicle from physical damage to the unit and items permanently attached to your vehicle by bolts, plumbing, and gas lines.

Commercial Auto Coverage:

Collision coverage (damage to the vehicle and permanently fixed items resulting from a collision with a barrier or other vehicle)

Liability coverage (Injuries to others while the vehicle is in motion, damage caused to property while in transit)

Comprehensive coverage (Not-at-fault incidents including theft, fire, vandalism, nature, and weather-related damage)

Does Not Cover:

potential damage or injuries caused by your food truck vehicle while parked
Personal auto policies are sometimes used for smaller vehicles.

Be sure to ask your policy provider and local jurisdiction before selecting a personal policy over a commercial policy.

Number 3. food truck insurance coverage for the contents of your truck

contents coverage normally covers any item that is not permanently fixed to the food truck unit itself you'll need additional coverages well.
Contents insurance is often labeled as contents coverage insurance or business property insurance.

food truck owners can also choose what's known as an actual cash value policy
(which would provide the cost of the product minus depreciation) and replacement cost value (which covers the cost of a new product).

Replacement policies will come with a higher premium than actual cash policies.

Contents Insurance Coverage:

collision damage of items during an accident

items that have been vandalized

in the cause of theft of items as well

your food truck also has items that are not stored in the truck but need coverage also

damage that occurs due to weather or fire

Does Not Cover:

Items fixed to the truck

It is important to pair commercial auto insurance with contents coverage to ensure that all of your food truck belongings are protected by your insurance.

Number 4. if you have employees you'll need workers compensation as well.

In general workers compensation actually protect an employee from loss of wages or medical benefits if they get ill or potentially sick at work

Workers’ Comp Coverage:

if one of your employees on-the-job slips and falls

an illness that is derived while actually working from the employee

Employee medical care, expenses, medication, and rehabilitation if they were to get hurt on the job

Employee long-term or permanent disability payments

Death benefits to family members of employees that experience a work-related death

what is not covered

Liabilities involving customers

Non-work related injuries or illnesses

OSHA actually requires legally to have workers compensation in almost Most states for food trucks and is really truly recommended to cover your business and make sure it's fully protected

so how do you actually get a food truck insurance policy

you can begin to search directly on Google and you can find food truck insurance companies that either specifically right food truck policies or offer it as an additional service

1. Google food truck insurance policy
Research what insurances are required in your state and township to legally operate a food truck.
check out multiple insurance company websites to get the best rate.
If possible, chat with other food truck owners in your area for advice on which insurance companies and coverage options they selected.

Number 2. evaluate your food truck business

Evaluate your business create a list of assets you currently own and their present value also your food truck registration and your potential employee driving records to ensure that if they are driving your vehicle they have a perfect record.

By gathering your important documents and records before you shop for insurance, you’ll be able to get a more accurate quote to help you make your decision.

Number 3. Commercial auto quotes
Reach out to various insurance providers with the same information and records to more easily compare direct quotes.

You may want to check with 2-4 providers to get an idea of the options available in your area.

You can also use a broker to contact providers for you and present the information in a way that is easy to understand and compare.

Number 4. Get Several Quotes and Make the Purchase fro the best insurance for your needs.

Layout the quotes side by side and choose the provider that provides you with the most coverage within your budget. Complete the insurance purchase with your intended provider.

Number 5. Renew your insurance policy every 6 months or 12 months

You’ll need to renew your insurance policy either annually or semi-annually.

In the period between purchasing and renewing your insurance, make sure that you and your staff are following safety protocols closely to keep your premium down.

At renewal, bring up coverage needs or instances where your budget is overextended with your insurance agent to make adjustments to your policy.

what insurance companies write food truck policies?

normally insurance companies that offer auto insurance policies can also write food truck insurance policies as well be sure to ask if they do
It is important to explore a few provider options to ensure full coverage will be provided to you.

You may receive a discount for bundling insurance policies with one company, but you can use multiple insurance companies to purchase different policies for your truck.

Insurance for Food Trucks Q and A
Below are some common question food truck owners have before investing in insurance:

Normal food truck claims are?
Below are a few examples of the types of claims normal food truck business owners will incur.

food truck owners experience quite a few break-ins due to the valuable equipment they store on their trucks when their trucks are parked on the street overnight.

With propane tanks hot oil and cooking equipment the potential for fire is very real.

Since food trucks carry and use cooking equipment, they are more likely than other vehicles to be involved in a fire-related incident.

What are some of the more minor claims that food truck entrepreneurs will experience?

very few food truck claims for insurance are related to illnesses or the food poisoning since food is the obvious main product sold very few claims have come forth about food poisoning
It is important to still take food safety precautions to avoid insurance risks and illness among your customers.

When insuring a food truck is it the same as a Food concession Trailers?

Mobile food trailers and food trucks may have similar policies that could overlap if you were to operate those two businesses at the same time

if you're operating a food trailer transporting that trailer two different food events on a trailer or a separate vehicle hitch those will also have to have additional insurance as well

what is also known as an extended commercial property coverage policy is what potentially would be needed for food trailers if you need additional Collision or accidents were to happen and liabilities were to come up you would have coverage

When speaking to the insurance company about your potential policy be sure to ask all questions that may come up if you're not sure about a certain situation that would need coverage

So what are some really great ways to keep a food truck insurance policy at a bare minimum.

so what is a great list of potential precautions a new food truck owner could take to maintain a low rate and keep insurance premiums down?

Hire some of the best health possible it can definitely be a challenge finding great reliable and honest workers for the food industry but make sure you do your due diligence in find great help.

Be sure to train your employees very well also ServSafe certification is required in many states for anyone serving food be sure to check the backgrounds as well to eliminate any potential people who have had driving records which could cause problems.

Create a booklet Emmanuel on cleaning and safety protocols that your food truck and follow along with the employees that you're going to hire when everybody knows what is expected in your standards are high you'll be better off for success.

Always maintain a very clean truck this would eliminate any potential pest insects or rodents from coming into your food truck while it's parked, also something to keep in mind or implementing cleaning schedules when you have a regular cleaning schedule everyone on the truck knows what's expected.

Perform regular preventative maintenance.

Create also a list to regulate the equipment, always check your equipment regularly and make sure that if there any minor repairs they are done quickly and fast this would eliminate any potential large situations that would pop up with the equipment you have attached to your truck.

Thank you for watching this video if it was helpful as always let us know to give us a comment down below or thumbs up and keep in mind this is for informational purposes only make sure that you do your due diligence and your own research and find out what your state city and county expect when you're operating a food truck.

As with every food operation every state does have its requirements so make sure you find out specifically what is required in your state. Listen to "Marketing Food Online Food Entrepreneur" on Spreaker.