Serving Up Protection: The Ultimate Guide To Insuring Your Food Truck
Food trucks come in all shapes and sizes. Some have a full kitchen and can accommodate large crowds at musical festivals. Others sell pre-packaged ice cream outside local baseball games.
No matter what kind of food truck business you run, there are food truck insurance coverages to make sure you get the protection you need.
What types of insurance do food truck owners need?
A common way to buy insurance for a food truck is with a business owner's policy (BOP). A BOP packages multiple insurance coverage types into one policy. A typical BOP includes general liability, property, and business interruption insurance.
There are also additional coverage types to customize your BOP insurance. Some typical food truck insurance coverages include:
- General liability insurance: General liability insurance covers the cost of a legal defense, settlements, and judgments if you injure someone or cause damage to someone else's property. For example, if your large umbrella blows over and injures someone, that would be a liability claim.
- Commercial auto insurance: Because a food truck is a restaurant on wheels, you'll need a commercial auto policy. Commercial auto insurance covers auto accidents that cause injuries or damage to someone's property. Other coverages — such as collision insurance to fix your vehicle if it gets damaged in an accident and comprehensive insurance for problems like vehicle theft, vandalism, hail, falling objects, and hitting an animal — also help protect food trucks.
- Business interruption insurance: Business interruption insurance, also called business income insurance, protects you if a problem you're covered for affects your ability to earn money. For example, if a fire forces you to close temporarily, this insurance helps cover extra expenses until you can reopen.
- Business property insurance: Business property insurance covers business property like ovens, grills, and other kitchen equipment. Potential problems covered include fire, explosions, and vandalism.
- Workers’ compensation insurance: This coverage protects a business if an employee has a work-related injury or illness, such as a bad cut while chopping ingredients. Workers’ compensation insurance pays medical costs and some lost wages.
Some food truck owners may want more coverage for their business. Additional food truck insurance options include:
- Business income from dependent properties: If your food truck depends on other businesses, such as someone to deliver fresh bread, and they cannot deliver, that could affect your sales for the day. Business income from dependent properties coverage can help replace lost income.
- Employment practices liability: Employment practices liability covers the business against claims that an employee's legal rights have been violated, including harassment, discrimination, wrongful termination, etc.
- Equipment breakdown coverage: Your food truck likely relies on equipment such as grills, ovens, and freezers. If one fails and you can't open for business, equipment breakdown coverage pays to repair or replace the broken equipment and covers lost income due to business interruption.
- Food contamination coverage: If a board of health or other government authority forces your food truck to close, food contamination coverage covers lost income and other costs, such as replacing contaminated food, cleaning the equipment, and advertising to help restore business reputation.
- Product liability insurance: Product liability insurance covers your business if one of your products causes property damage, injury, or illness, such as food poisoning.
Finding the best food truck insurance policies can be challenging. A business insurance agent can help you identify coverage that best suits your needs.
How are insurance premiums calculated for food trucks?
The cost of food truck insurance varies depending on several factors. Apart from the types of coverages in your policy, providers will also consider:
- Locations: Operating locations will impact rates as urban areas or places prone to natural disasters pose more risks than others.
- Vehicle and equipment: The type and cost of a vehicle, as well as the equipment, play a role in your premium, as insurance providers must cover the costs if they become damaged.
- Claim history: Businesses with past claims present a bigger risk to insurance providers, often resulting in higher premiums.
- Customers: To an insurer, more customers mean a higher chance of an issue leading to a claim. This can result in more expensive insurance premiums.
- Employees: Food trucks with many employees may need to pay more for workers’ compensation insurance.
What factors should you consider when choosing an insurance provider for your food truck?
Finding the right insurance provider for your food truck business is the key to getting sufficient protection at a low rate. The most important consideration when looking for a provider is that they have the coverage options you’re looking for at a price you can afford. Researching their reputation, financial stability, and past customer reviews can also provide insights into the company's reliability and how straightforward the claims process is.
What are common insurance claims filed by food truck businesses?
Because food trucks are businesses on wheels, they may file claims relating to both business and auto-related issues. Common claims result from equipment or vehicle damage or failure. A problem with any kitchen equipment, such as an oven, sink, or grill, could result in lost income for the business. Damage to a vehicle, such as an accident that requires repairs, can also significantly hurt the business.
How can food truck owners minimize risks and insurance costs?
Food truck owners who want to lower their risks and insurance premiums can take action. Implementing regular safety and cooking training for staff members keeps everyone on the same page and reduces the likelihood of preventable risks. Keeping your food truck safe and secure by installing security systems to detect and prevent vandalism will also keep expenses down in the long run.
Choosing the right insurance provider and policy is also essential when insuring your food truck. With many insurance companies and coverage options, finding the right provider at the lowest price can feel intimidating. Using EverQuote to shop around is the best way to get the coverage you need at the cheapest possible rate.
EverQuote helps you compare rates and providers by connecting you with experienced agents who can get you the best deals. To learn more about what EverQuote can do to make sure your food truck gets the coverage it needs, contact us today.