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Food Truck Insurance: Types and Costs Explained

If you’re looking to start your own food truck, one of the most important business steps is investing in insurance. Without the proper insurance or coverage, your food truck is at risk of costing you thousands of dollars or putting you out of business altogether. In this resource, you’ll get an idea of ​​how much food truck insurance could cost and what types of insurance you may need to purchase to make sure your mobile business is protected.

food truck insurance cost

The average cost of food truck insurance is about $2,000 – $4,000 a year, but can vary depending on the coverage option you choose and your provider. Below is a breakdown of the average cost of food truck insurance:

Reading: What insurance do i need for a burger van

  • general liability insurance: $300 – $800 premium cost (for $1,000,000 of coverage and $0 deductible)
  • Commercial Auto Insurance: $1,500 – $3,000 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 (per $1,000,000 of coverage and $0 deductible)
  • food truck insurance rate factors

    In most cases, your insurance rate is calculated based on a variety of different factors. Here’s a list of some of the more common factors that can affect what you pay:

    • Provider: Each insurance provider may offer a different rate than the following. while most offers may be within the same general price range, you should shop around to find the best rate.
    • Company Size: The size of your business also affects your insurance rates. In general, it is safe to assume that a larger company will incur higher costs.
    • State Policies: Depending on where your food truck operates, you will likely see a difference in the insurance policies that are required. The permits and licenses required for your truck to operate legally will vary depending on the state or city you are in.
    • desired neighborhood: crime rates, traffic, and road conditions are just a few of the factors that can vary between neighborhoods and affect your insurance costs.
    • Risk Factors: The tools and equipment you carry on your truck can create different risk factors, which in turn change your rates. for example, operating a grill presents a higher risk than using a refrigerator.
    • Equipment Value: In general, the more you spend on equipment, the higher your rates.
    • Replacement cost: In some cases, the cost to repair something can exceed the cost to replace it entirely.
    • employee payroll: Depending on how many people you’ve hired and how much they’re paid, your insurance costs may go up.
    • Amount of Coverage: Most insurance providers give you the option to choose what type of coverage you want. the level of coverage you choose will change your rates. for example, choosing the minimum coverage reduces the cost, while choosing the maximum coverage increases it.
    • deductible options: A deductible is the amount of money the insured pays out of pocket. Depending on how much you’re willing to pay, your rates will change.
    • what kind of insurance is needed for a food truck?

      Whether you’re buying a food truck or renting one, it’s important to consider the types of insurance you’ll need to fully protect your business and vehicle from liability, theft and collisions. The following types of insurance are required for mobile food businesses, including food trucks, ice cream trucks, and catering trucks.

      1. general liability insurance

      Food truck general liability insurance is necessary to protect your mobile business from incidents and accidents involving third parties while your vehicle is stationary but open to the public.

      general liability coverage:

      • product-related lawsuits, such as those involving foodborne illness, food poisoning, burns from hot food, cuts from glass or metal utensils, and food contaminated with debris or allergens.
      • facilities-related lawsuits, including customer slips and falls on pavement, ice, or standing water around your food truck, as well as any other injuries to customers or bystanders on your premises.
      • advertising lawsuits, such as personal injury, defamation and slander in marketing campaigns (intentional or not).
      • property damage claims and fines such as those involving damage caused by your truck to someone else’s building or property.
      • legal fees and representation in court if you are sued, regardless of the outcome.
      • does not cover:

        • employee-related incidents
        • car accidents
        • incidents while your truck is driving from one place to another
        • Most vendors, owners, and commissary kitchens require food truck owners to have a minimum $1,000,000 general liability policy to do business together, and will often require that they be include as an additional insured in your policy

          2. commercial auto insurance

          Commercial auto insurance is required for all vehicles used for business purposes to protect them from liability and damage in transit. Policies included in commercial auto insurance protect your vehicle against physical damage to the unit and items permanently attached to your vehicle by bolts, plumbing, and gas lines.

          commercial auto coverage:

          • collision coverage: covers damage to the vehicle and permanently fixed items resulting from a collision with a barrier or another vehicle.
          • civil liability coverage: covers injuries to third parties while the vehicle is in motion, damage caused to property during transit.
          • Comprehensive Coverage: Covers no-fault incidents, including theft, fire, vandalism, nature damage, and weather-related.
          • does not cover:

            • injuries and damage caused by your vehicle while stationary
            • Personal auto policies are sometimes used for smaller vehicles. be sure to check with your policy provider and local jurisdiction before selecting a personal policy over a commercial policy.

              3. content insurance

              Contents insurance covers items that are in your food truck but are not permanently attached to the unit. Contents insurance is often labeled contents coverage insurance or commercial property insurance. Business owners have the option to choose between an actual cash value policy (which would provide the cost of the product less 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.

              content insurance coverage:

              • damage to elements caused by a collision
              • smashed items
              • stolen items
              • items that are not stored on the truck
              • items damaged by weather or fire
              • does not cover:

                • items attached to truck
                • See also: The Pros and Cons of Dollar-Cost Averaging | FINRA.org

                  It’s important to combine business auto insurance with contents coverage to make sure all of your food truck’s belongings are protected by your insurance.

                  4. workers compensation insurance

                  Workers’ compensation is necessary to protect your employees with wages and medical benefits if they become sick or injured on the job.

                  workers compensation coverage:

                  • employee slip and fall at work
                  • employee work-related illnesses
                  • employee medical care, expenses, medication and rehabilitation in case of injury at work
                  • employee long-term or permanent disability payments
                  • death benefits for family members of employees who suffer a work-related death
                  • does not cover:

                    • client responsibilities
                    • non-work-related injuries or illnesses
                    • Workers’ compensation is an osha legal requirement in most states for food trucks and is strongly recommended in all other states to ensure your business is fully protected.

                      See also: Dollar-Cost Averaging: How To Build Wealth Over Time | Bankrate

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                      how to get food truck insurance

                      As you write your food truck business plan, you’ll also want to begin your search to find the right food truck insurance for your business.

                      1. conduct research

                      Find out what insurance is required in your state and municipality to legally operate a food truck. Visit insurance company websites to get an idea of ​​the coverage options they offer. If possible, chat with other food truck owners in your area to get advice on which insurance companies and coverage options they selected.

                      2. make a commercial evaluation

                      Compile a list of your assets with their value, payroll records, trucking records, and employee driving records. By gathering your important documents and records before you buy insurance, you’ll be able to get a more accurate quote to help you make your decision.

                      3. get quotes

                      Contact multiple insurance providers with the same information and records to more easily compare direct quotes. you may want to check with 3-5 providers to get an idea of ​​what options are 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.

                      4. review quotes and buy

                      layout quotes side by side and choose the provider that gives you the most coverage within your budget. complete the insurance purchase with your intended provider.

                      5. reassess on renewal

                      You will need to renew your insurance policy annually or semi-annually. In the period between purchasing and renewing your insurance, make sure you and your staff are following safety protocols closely to keep your premium low. At renewal, discuss coverage needs or budget overruns with your insurance agent to make adjustments to your policy.

                      See also: Dollar-Cost Averaging: How To Build Wealth Over Time | Bankrate

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                      Where do I get food truck insurance?

                      Most insurance companies that provide auto insurance will have the necessary policies to protect your food truck business. It is important to explore a few provider options to ensure that you are provided with comprehensive coverage. 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.

                      The following insurance providers are known to offer food truck insurance and quotes:

                      • progressive commercial
                      • insurance for farmers
                      • insure my food truck
                      • highway insurance
                      • bolt insurance agency
                      • See also: Dollar-Cost Averaging: How To Build Wealth Over Time | Bankrate

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                        food truck insurance frequently asked questions

                        The following are the most common statements found by food truck owners:

                        what are the most common claims about food trucks?

                        • theft: Because food truck owners often store valuables and equipment in their trucks and trucks are often left unattended overnight, they are a frequent target for theft and theft
                        • Fire: Because food trucks carry and use cooking equipment, they are more likely to be involved in a fire-related incident than other vehicles
                        • what are the less common claims of food trucks?

                          Less common claims about food trucks have to do with foodborne illness and food poisoning, even though food is a food truck’s main source of income. it is still important to take food safety precautions to avoid insurance risks and illnesses among your customers.

                          Do food trucks and food trailers use the same insurance?

                          Food trucks and food trailers may have some overlapping insurance policies. Since a food trailer is towed by a vehicle, the trailer and the vehicle will need to be insured separately, while food trucks will only need an auto insurance policy for their vehicle. Extended auto and commercial property coverage is typically needed to ensure food trailers are fully protected from collision damage and liability. Be sure to ask your carrier for more information on how to properly protect your mobile food business.

                          how to keep food truck insurance premiums low

                          To keep food truck premiums low, your goal as a business owner should be to keep claims low. Here are some precautions you can take to keep your rate low:

                          • Hire the best staff: Conduct background checks, request driving records, provide thorough training, and have your employees servsafe<certified .
                          • Implement safety and cleaning protocols: ensure your truck is cleaned regularly to reduce pests and potential disease by providing clear rules and cleaning schedules along with safety tips.
                          • Maintain Your Truck: Check your equipment regularly and perform preventative maintenance to keep your truck in working order. Also, consider cleaning on a daily, monthly, and quarterly schedule to ensure filters are clean, gas lines are clear, and oil has been changed.
                          • Your food truck is important to you. Make sure you’re protected against liability, collision and other threats by covering it with comprehensive insurance to give you peace of mind and a successful long-term business.

                            The information provided on this website does not constitute and is not intended to constitute legal advice. see our content policy for more details.

                            See also: Daily Van Insurance | One Day Van Insurance | Tempcover

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