Food trucks are a modern take on delivering delicious restaurant-quality meals. Starting a food truck business may seem more natural than opening a restaurant. The truth is there are many things to consider before you serve your clients' favorite street foods, which includes having the right insurance coverage.
Do you need insurance? And what type of coverage is recommended for a food truck? This article shares the different types of policies you need to consider before opening your mobile business.
Why do you need insurance for your food truck?
As a business, you’re trading a service/product in exchange for money. You’re dealing with customers, and you’re also driving a highly customized vehicle. What this means is that you’re exposed to certain types of risks that range from food poisoning to your truck breaking down or getting into an accident. Food truck insurance is necessary to help protect you and your business from unexpected events.
The cost of insurance for your food truck ranges from $1,300 to $7,000 per year. It all depends on the type of coverage you’re looking for, but you should consider obtaining commercial auto insurance and general liability insurance at the very least.
Commercial auto insurance
You need to insure your vehicle against collision and any other vehicle-related damage. Commercial auto insurance is similar to personal auto insurance, but the liability coverage for commercial auto insurance is usually much higher than the amount provided for by personal auto insurance.
Commercial vehicles, including food trucks, are exposed to higher risk and liability. According to Fits Small Business, the average cost for commercial auto insurance ranges from $1,274–$3,148; price varies depending upon location, vehicle type, and policy coverage.
General liability insurance
With general liability insurance, you protect your mobile business from risks not covered by the commercial auto policy, and may include food poisoning, injuries, allergies, and other legal matters.
General liability insurance is not mandatory but think about your business and the activity that involves running a mobile restaurant. You serve meals to your customers every day. Did you know that a total of 48 million people get sick every year in the United States due to food poisoning? 52% of them are attributed to eating out in restaurants. The Centers for Disease Control and Prevention states in a 2016 report that 3,000 people die from food-borne illnesses annually.
Avoid running into unnecessary headaches and help protect yourself by adding general liability to your food truck insurance. The average annual premium ranges from $500 to $602 and most insurers have a $2 million policy limit.
Other types of insurance to consider
Are you going to run the business by yourself or do you plan on hiring people? Most states require workers' compensation insurance for employers who hire one or more employees. This type of policy helps protect business owners from common accidents that happen in the workplace such as slip and falls and other injuries.
With a workers' compensation policy you help cover your employees’ medical costs as well as lost wages should they become ill or injured. The annual premium for this type of coverage runs between $1,436 and $2,490.
One last food truck insurance type to take into consideration is property coverage. Your food truck comes with equipment you need to protect such as an oven, stove, or refrigerator. Keeping your assets protected is essential to help you save money in the event of a replacement but also to continue running your business successfully. The average annual premium for property insurance ranges between $509 and $1,199.
You don’t need to rely on the same broker to insure your mobile business. Shop around to see which company offers the best insurance for your food truck and compare rates as well as coverage before making a decision.
Starting a new food truck business takes time and effort, but with the right coverage in place, you’re off to a safer start. Infinity Insurance or Infinity Insurance Agency, Inc., can help you secure commercial auto, general liability, and business owner policies that meet your needs and budget. Call one of our friendly agents today at 1-800-INFINITY or visit our website to receive a quote in minutes.