Food Truck insurance – what kind and at what cost

Whenever you budget the expenses of your business, Food Truck insurance must be included in the list because you can’t always know exactly what can happen in the future.

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With the protection provided by general insurance and all the other sorts of insurance we will tell you about, you can protect your business and yourself in case something unwanted happens.

Like any business owner, for your Food Truck enterprise, you must consider how much financial danger you are taking on.

If your Food Truck business runs without proper insurance, you are taking a tremendous chance not just of losing some money but of a total wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the results of their actions. 

Food Truck Insurance

In this article, we are giving very general guidelines for small businesses to outline what the main kinds of insurance that you need are, and where possible, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your Food Truck business?

What this means, for any Food Truck business owner, is that if some customer claims that your business caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your Food Truck business is not protected by laws in the same way as states are, where edicts can place a “cap” on the maximum level of liability.

In some states, like Texas, there are specific monetary levels that limit the amount an adjudicator can award in any case against the state.

In a court case, it’s purely the right of the jury to award whatever amount they deem appropriate, even sometimes giving a person more than they have sort.

When you are running your Food Truck operations, you can’t avoid responsibility for the results of your actions.

Even more importantly, unless you have spent in advance the money necessary to have your business running as an LLC, all of that liability belongs to you as a person.

What does Food Truck insurance protect you from?

For your Food Truck business, the most important kinds of insurance are designed to cover the risks to your business from accidents, from unexpected events, and from mistakes.

In addition there are some legal kinds of insurance that various states require.

In the next few paragraphs, we will outline the most important points any Food Truck business owner should remember when negotiating the insurance needed.

The main categories of insurance for your Food Truck businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability for your Food Truck operations

Any Food Truck business is dealing directly with other people, and that means you usually have the danger that some accident can happen to them personally or else something of theirs can be damaged.

In such a case, they can require compensation.

General liability insurance policy for your Food Truck business covers you against claims coming from injury to visitors or damage to their property.

It protects your Food Truck business from the claims themselves and as well to any associated court costs and legal fees of the lawsuits.

In many cases, it can also help you to qualify for extra business from city and state organizations, where contracts insist on proper liability insurance.

The usual level of general liability insurance for your Food Truck business would be with a boundary of $1 million for a single event and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your Food Truck insurance operations.

Professional liability insurance for your Food Truck business

In the event where a customer alleges some negligence, errors, or omissions in how you conducted your Food Truck business for them, you can quickly have to fight a monetary claim.

Even if the case against you is ruled in your favor, the cost of defense can be substantial, and the impact on your reputation can be damaging.

Most small Food Truck business should have enough professional liability insurance to cover a once-off claim of $25,000, with annual cover of $50,000.

See the table in the cost of Food Truck insurance section below for average prices of professional liability insurance for your Food Truck operations.

Product liability insurance for your Food Truck business

Whatever goods you sell or advice you give about the goods, you are running a risk that clients may claim that what they received didn’t meet your description of function, or that your recommendation was basically incorrect.

You need to know the explicit laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held responsible for results caused by products claimed to be defective.

To cover yourself against any likely lawsuit, you need Product liability insurance for Food Truck

Only you can estimate exactly how much insurance you must have.

Best advice is to consult with experienced insurance agents, brokers or company representatives for help.

Commercial insurance

Commercial vehicle insurance for your Food Truck business

Take care! – most policies for private vehicle insurance do not cover any occurrence like theft or accidental damage when the vehicle is being used for business purposes.

The proper way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a direct commercial vehicle insurance package.

Commercial van policies guarantee the value of any vehicle in case of accident, malicious damage, fire, or theft.

As well, in case of any accident, the car itself, the content and any legal bills, medical expenses, and property damage is covered if your car is involved in a crash.

Most states, other than Virginia and New Hampshire, insist on this type of insurance.

The required value of the insurance is worked-out for the depreciated value of the vehicle, and your declared level of cover of contents. 

Tools and Equipment insurance for your Food Truck business

Since your Food Truck business needs specific and expensive equipment, you know how much it can cost to replace it in case of any damage, loss, or theft.

The equipment may be subject to malicious damage, deliberate fire, theft, other such unforeseen acts.

Also, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can eliminate your whole business in one stroke.

Unless you can afford to immediately replace such unique gear quickly out of your own pocket, you must have full-level equipment insurance so that you can immediately buy any equipment needed to keep your Food Truck business running.

It is difficult to advise how much equipment insurance you need – it’s really dependent on how much you have invested in your Food Truck business’ equipment.

Commercial Property insurance for your Food Truck operations

Any Food Truck business that owns or rents space in a building needs a commercial property insurance policy.

If you own the building, you may already have a substantial capital investment, along with a big liability if there’s a mortgage.

Your physical building location must carry insurance coverage for the value of the premises and contents against unexpected occurrences like fire and storms, and against man-made damages like theft and vandalism.

If your Food Truck business deals in areas of high risk, like Texas or South Carolina, additional coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Rhode Island, where intense cold snaps can cause damage to outer coverings of Food Truck business premises, there is a need for more extra cover than in warmer climes.

Although the level of cover depends completely on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of Food Truck insurance section below to give some idea of the average prices per million dollars of property insurance for your Food Truck business.

Temporary insurance by month, week or day for your Food Truck business

Is your Food Truck business working part-time or casually, or is the level of business variable?

Using short-term insurance makes excellent sense. Business insurance by the month, day, or week – temporary insurance for Food Truck – are special policies where you can cover a nominated period when you want to be covered.

By only paying for that period of cover, you will save by having reduced premiums but still having identical risk cover.

The important feature of short-term insurance is that you buy the cover for a defined period – a nominated date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of higher business activity, get the existing cover raised.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your Food Truck business

You have the choice to combine most of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP merges commercial property and public liability insurance by incorporating these coverages into one insurance policy, which can save you money.

BOP insurance will shield you if any claims of injury or property damage are made.

It is frequently the right choice for small and medium-sized Food Truck businesses, such as yours.

There are a few limits that will determine whether BOP is suitable for your own business.

BOPs cannot cover your professional liability or commercial vehicle risks.

Also, the size of your business will dictate whether you are allowed to take out BOP cover.

The typical business that can take out a BOP policy must have less than one hundred employees, and maximum five million dollars in annual turnover.

As well, you must separately take out the necessary worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your Food Truck business employees

In almost all states, it is mandatory to have workers compensation insurance when your Food Truck business has one or more employees.

Workers compensation insurance covers the operation against any costs that arise if an employee experiences an injury or becomes sick as a result of work.

The benefits include medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s requirements in this regard can leave you as the employer obliged to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only authorize coverage from the government-run monopoly state funds.

In these states, you can’t get your workers compensation obligations from private insurance companies.

Workers compensation premiums are computed based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must consult the relevant authorities in your state.

Average costs of these types of insurance

Although every Food Truck insurance requirement is unique, there are enough examples of usual quotes from insurance companies for us to give appropriate guidelines, including what are the cheapest rates offered.

Of course, you should always check with an agent what’s relevant for your business.

The list below is of annual premiums we have collected for the main types of insurance your Food Truck businesses needs.

Types of insurance Price range
General liability insurance $755 – $1149
Equipment insurance $402 – $1319
Product liability insurance $215 – $664
Commercial vehicle insurance $1624 – $2990
Commercial insurance $891 – $2943
Public liability insurance $351 – $642

Cost of insurance for your Food Truck operations depends on many different factors.

We have estimated these figures for small self-employed Food Truck businesses.

In larger states like California, premiums are generally about 20%-30% higher than national averages, whereas in smaller states like Oregon, they will be about 20%-30% cheaper.

The location and size and type of your Food Truck business can have a big effect on the cost of different policies.

You should consult with professional insurance agents and brokers, or insurance company representatives.

As well you can let the internet do the work for you by enquiring about insurance companies near where your business is located.

Another useful source of information is the local Better Business Bureau in your city.

FAQ

What is small business insurance for Food Truck operations?

This is a wide term used to describe basic insurance policies designed to protect Food Truck business owners from risks like bodily injury, property damage, claims of negligence.

Does my Food Truck business have to have insurance?

Some of the types of insurance are not mandatory for you to run your business, but they can protect you from risks in your business operations.

Certain other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small Food Truck business insurance policy cover?

Liability insurance provides insurance against lawsuits or claims filed by a customer for bodily injury, property damage, or negligence.

The specific cover will vary based on your own operations.

See the table in the costing section above for average prices of the best policies for Food Truck insurance.

How much will Food Truck business insurance cost?

As well as the size of the business, some other factors, such as location and claims history, are used to determine your policy’s cost.

You should talk to professional insurance agents and brokers, or insurance company representatives.

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