Food trucks are an increasingly ubiquitous sight in American cities — serving everything from waffles to dumplings to gourmet grilled cheese sandwiches. For aspiring restaurant owners, starting a food truck business can be a low-overhead way to get into the restaurant game. But getting a food truck off the ground is still pricey, and food trucks, just like personal vehicles, need car insurance. In fact, in order to have a permit to operate in your city, you may be required to purchase a certain amount of insurance coverage.
Food truck insurance is a little more complicated than a simple commercial auto policy, which is a type of car insurance for vehicles that are used for business purposes.
In addition to that coverage, food truck owners also need coverage for the unique risks that come with operating a business. That includes general liability coverage or business liability coverage, which covers damage or injury you’re liable for, like if a customer is accidentally burned by food that came right out of the fryer, and worker’s compensation coverage, which pays your employees if they are injured on the job. Depending on where you are, and the details of your operation, you may need even more coverage than just that.
Who needs food truck insurance?
There’s a lot to consider when you’re starting a food truck beyond the initial investment needed to buy supplies and equipment. You’ll also need a business license and various permits from your city, county or state — check with your local government to find out what’s required of you before you can start serving food.
Your state will likely also require food trucks to carry a certain amount of insurance. You’ll need insurance for any kind of mobile food business, even if you don’t actually cook any food in your vehicle. That includes:
Ice cream trucks
Some insurance carriers may offer specific food truck insurance that bundles together the various coverages you’ll need, but it’s more likely that you’ll need to piece together coverage for your food truck by purchasing various types of insurance policies that provide coverage for different aspects of your business.
It’s possible to do this research on your own, but a licensed, independent agent can also help you understand and purchase the right amount of coverage for your food truck.
What insurance does a food truck need?
The exact insurance needs of your particular food truck depend on a few factors, like where you’re located and what kind of business you have. A truck with ovens, refrigerators and deep-fryers on board will need more coverage than a lunch truck that sells premade sandwiches and sodas. In general, however, food truck owners should anticipate needing several types of coverage.
A commercial auto policy is exactly what it sounds like, it’s car insurance for a business vehicle. Like personal auto insurance, a commercial car insurance policy is made up of several different components that protect your food truck in different ways. Those include:
Liability coverage: Bodily injury liability (BIL) covers you when you or one of your employees cause bodily injury to another party while driving your food truck, and property damage liability (PDL) covers you when you or one of your employees cause property damage to another party while driving your food truck. (These types of coverages are combined into a “combined single limit” in commercial policies, while in personal auto policies are often separated out.)
Medical payment coverage / personal injury coverage: Pays medical expenses for the driver and passengers of your food truck if they’re in an accident, regardless of fault.
Collision coverage: Pays for damage to your food truck from accidents, regardless of fault.
Comprehensive coverage: Pays for damage to your food truck from theft, vandalism, extreme weather, falling objects, or other non-crash incidents.
Uninsured/underinsured motorist coverage: Pays for damage to your food truck caused by an uninsured or underinsured driver.
Commercial policies also offer a number of types of specialized coverage that personal policies do not, like rental reimbursement with downtime, which covers the costs to rent a temporary replacement if your food truck needs repairs, or hired vehicle coverage, which covers you if you rent cars or vans for employees or clients.
If your food truck is actually a trailer attached to a vehicle, you may need to add an endorsement to your commercial auto coverage to ensure that it extends to cover the trailer.
In addition to commercial auto insurance you’ll also likely need general liability coverage, also called commercial general liability. This protects you against liability for any third-party injuries or damage, meaning that if customers or clients are injured, or you or your employees are responsible for damage, your liability coverage will cover the costs.
This type of coverage is essential for food truck owners, because the nature of the business exposes you to a variety of liabilities. A customer could get sick from contaminated food or be burned by hot oil; or you or your employees could accidentally damage or break a customer’s valuable property while catering an event — there are several instances where general liability coverage can step in and cover expensive medical bills, repair costs or cover the legal fees from a lawsuit.
Even if you only have one or two employees, workers compensation insurance is essential coverage, and required by law in almost every state. Workers comp insurance will pay for an employee’s medical expenses and some of their lost wages if they’re injured at work or become ill as a result of their job.
Covered accidents include everything from an employee injuring their back while lifting a box of produce to a cook slipping on an oily floor or accidentally cutting their finger to employees injured in a food truck fire.
Commercial property insurance
Commercial property insurance is another important type of coverage for food truck owners to consider, especially if your food truck includes expensive appliances like grills, refrigerators, freezers or fryers.
Commercial property insurance essentially covers just the physical contents of your food truck, which includes kitchen equipment as well as things like computers, signs, important documents you might have on board and other people’s property, like if your employees bring a backpack to work and its contents are destroyed in a fire.
How much is insurance for a food truck?
Because there isn’t just one product that comprises food truck insurance, the cost of insuring your food truck will vary widely depending on how many different insurance products you need and how valuable the food truck itself is.
Even if you’re buying a food truck insurance bundle from a car insurance company that offers a food truck insurance package, you can still estimate the cost of insurance by considering how much each type of insurance will cost.
Commercial auto insurance, which you need to protect the food truck itself as well as your liability while driving it, is typically more expensive than personal car insurance. It may cost you around $1,000 to $2,000 per year, or $80 to $160 per month. Workers comp insurance and general liability might be closer to $50 to $70 a month each.
Again, the costs will depend on your coverage needs as well as the details of your food truck business. But if you’re budgeting for starting a food truck, don’t forget to include at least a couple hundred dollars a month for the various types of insurance coverage you’ll need.