Food Truck Insurance Requirements: Everything You Need To Know

Food trucks have become increasingly popular over the years, offering a wide variety of foods and drinks to customers on-the-go. However, owning a food truck comes with its own set of risks and liabilities. That’s why it’s important to have proper insurance coverage to protect your business and assets. In this article, we’ll explore everything you need to know about food truck insurance requirements.

• What insurance coverage food truck businesses may need
• Legal requirements of food truck insurance
• How much does food truck insurance cost? 
• What factors affect the food truck insurance costs? 
• Buy food truck insurance from carriers or brokers 
• Tips for finding cheap insurance for your food truck

What insurance coverage food truck businesses may need 

Food truck business’s operations are complicated and may be exposed to several types of risks. In order to protect the business sufficiently, food truck business owners may need to consider one or many of the coverage below: 

General liability insurance

General liability insurance is a must-have coverage for food trucks. It provides protection against claims for property damage, bodily injury, or personal injury. Examples of how general liability insurance can benefit food truck owners include:

• If a customer slips and falls while ordering food from your truck, general liability insurance can help cover their medical bills and other related costs.
• If a customer claims that they became sick after eating your food, general liability insurance can help cover the costs of any legal fees or settlements.

Commercial truck insurance

Food trucks are essentially mobile businesses, which means they require commercial truck insurance to protect them from accidents and other liabilities. Examples of how commercial truck insurance can benefit food truck owners include:

• If you’re involved in an accident while driving your food truck, commercial auto insurance can help cover the costs of any property damage or injuries sustained by the other party.
• If your food truck is stolen or vandalized, commercial auto insurance can help cover the costs of repair or replacement.

Commercial property insurance

Commercial property insurance provides coverage for your food truck and any other property used for your business, such as equipment, inventory, and supplies. Examples of how property insurance can benefit food truck owners include:

• If your food truck is damaged or destroyed by a fire or natural disaster, property insurance can help cover the costs of repair or replacement.
• If your food truck is broken into and equipment or inventory is stolen, property insurance can help cover the costs of replacement.

Workers’ compensation insurance

If you have employees working on your food truck, workers’ compensation insurance is required in most states. This coverage provides benefits to employees who are injured or become ill as a result of their work. Examples of how workers’ compensation insurance can benefit food truck owners include:

• If an employee is injured while working on your food truck, workers’ compensation insurance can help cover the costs of medical bills and lost wages.
• If an employee becomes ill as a result of their work on your food truck, workers’ compensation insurance can help cover the costs of their medical treatment and related expenses.

Commercial umbrella insurance

Commercial umbrella insurance provides additional liability protection beyond the limits of your other insurance policies. Examples of how umbrella insurance can benefit food truck owners include:

• If you’re faced with a large claim that exceeds your other policy limits, umbrella insurance can help cover the remaining costs.
• If a customer sues your food truck business for a large sum of money, umbrella insurance can help cover the costs of any legal fees or settlements.

Legal requirements of food truck insurance

In addition to choosing the right types of insurance coverage, food truck owners must also comply with legal requirements. Federal and state laws govern food truck insurance, and insurance is often required for permits and licenses.

Minimum coverage limits for different types of insurance vary depending on state and local laws. For example, California requires food truck owners to have liability insurance with a minimum coverage limit of $1 million per occurrence and $2 million aggregate. In New York, the minimum liability coverage limit is $300,000.

In all states, commercial truck insurance is legally required. If you have employees working for your food truck business, you will be required to provide workers comp insurance to them. 

How much does food truck insurance cost? 

The average cost of food truck insurance is $47 per month, or $560 per year.  This is for a $1M/$3M general liability insurance policy.  

A food truck business may need more coverage, below are the average costs of different coverage: 

Food truck coverage	Average costs
General liability insurance	$47 per month
Commercial truck insurance	$135 per month
Commercial property insurance	$72 per month
Workers comp insurance	$208 per month
Umbrella insurance	$115 per month

Keep in mind that this is just the average. Your rate will be different. Be sure to get quotes from a few companies or work with a broker like Simply Business or Smart Financial to compare several quotes to find the cheapest one.

What factors affect the food truck insurance costs? 

The cost of food truck insurance can vary depending on several factors. Here are some common factors that can impact the cost of food truck insurance:

1. Type of coverage: The type of coverage and the amount of coverage you need will affect the cost of your insurance. For example, a food truck owner who only needs liability insurance will pay less than one who needs comprehensive coverage that includes liability, property, and workers’ compensation insurance.
2. Location: The location of the food truck can impact insurance costs. Some areas may have higher rates of accidents or theft, which can increase insurance costs. Similarly, food trucks operating in areas with high traffic or dense population may also face higher insurance costs.
3. Value of the truck and equipment: The value of the food truck and equipment will impact insurance costs. A newer or more expensive truck will require higher coverage limits and therefore will result in higher insurance costs.
4. Driving record: The driving record of the food truck owner and any employees who will be driving the truck can affect insurance costs. If the drivers have a history of accidents or traffic violations, insurance rates may be higher.
5. Experience: Insurance companies may consider the experience of the food truck owner when setting rates. An owner with several years of experience in the food truck industry may be considered a lower risk and therefore qualify for lower rates.
6. Menu and food preparation: The menu and food preparation methods can also impact insurance costs. If the food truck serves high-risk foods or uses cooking methods that increase the risk of fire or injury, insurance costs may be higher.
7. Seasonal operations: If the food truck operates seasonally, insurance costs may be higher during the months of operation due to the increased risk during peak business periods.

It’s important to work with an experienced insurance provider who understands the unique risks associated with operating a food truck business and can help you find the appropriate coverage at a reasonable cost.

Buy food truck insurance from carriers or brokers 

In general, food truck businesses can either buy insurance from carriers or brokers. Here are the best food truck insurance companies that you recommend. Each option has its own pros and cons: 

Buying food truck insurance from carriers directly: 

Here are the best food truck insurance carriers that we recommend:

• Progressive: Best Overall with comprehensive coverage and several discount programs
• biBERK: Best for affordable rates and great digital experience
• THREE: Best for comprehensive coverage including all coverage a food truck business may need

Pros:

1. Convenience: Buying directly from an insurance carrier can be convenient, as it can be done online or over the phone, without the need to work with a middleman.
2. Cost: In some cases, buying directly from a carrier can be less expensive than going through a broker, as there is no commission to pay to a third party.
3. Direct communication: Working directly with an insurance carrier means that the business owner can communicate directly with the insurer in case of questions or concerns.

Cons:

1. Limited options: Insurance carriers may only offer their own policies, limiting the business owner’s options for coverage.
2. Lack of expertise: Business owners may not have the expertise to understand which types of coverage are necessary and which limits to purchase.
3. Limited support: If a business owner has questions or concerns about their policy, they may not have a dedicated support person to turn to for assistance.

Buying food truck insurance through brokers:

Here are the top brokers that we recommend:

• Simply Business: Best for comparing several quotes to find the cheapest one
• Smart Financial: Best for finding cheap liability-only minimum coverage
• Tivly: Best broker if you prefer working with knowledgeable agents

Pros:

1. More options: Insurance brokers can offer a range of policies from different carriers, giving business owners more options for coverage.
2. Expertise: Insurance brokers have experience working with food truck businesses and can provide expert advice on the types of coverage and limits needed.
3. Dedicated support: Brokers offer a dedicated support person for questions and concerns, and can assist with claims if necessary.

Cons:

1. Additional steps: Working with a broker requires an additional step in the process, which can take additional time.
2. Potential for conflict of interest: Brokers may have incentives to recommend policies from certain carriers, even if they are not the best fit for the business.

Overall, both options have their pros and cons, and the decision of whether to buy directly from a carrier or through a broker will depend on the business owner’s specific needs and preferences. It’s important to do research and compare quotes from multiple sources before making a decision.

Tips for finding cheap insurance for your food truck

Here are some tips to help food truck business owners find affordable insurance:

1. Shop around: Get quotes from multiple insurance carriers or brokers to compare coverage and pricing. Don’t just settle on the first quote you receive, as prices can vary significantly between providers.
2. Bundle policies: Some insurance providers offer discounts for businesses that bundle multiple policies, such as general liability, commercial auto, and property insurance.
3. Increase deductibles: Raising your deductible can lower your premium, but it also means you’ll pay more out-of-pocket if you need to file a claim. Consider the risk versus the potential savings before choosing a higher deductible.
4. Maintain a good driving record: Insurance premiums for commercial auto insurance can be influenced by the driving record of the business owner and any employees who drive the food truck. Encourage safe driving practices and consider running background checks on potential employees.
5. Improve security: Installing security measures, such as an alarm system or GPS tracking, can reduce the risk of theft or damage to the food truck. This may lower insurance premiums, as the business is perceived as less of a risk to the insurance provider.
6. Consider liability-only coverage: Liability-only coverage can be less expensive than comprehensive coverage, which covers damages to the food truck itself. This option may be best for businesses with older or less valuable vehicles.
7. Opt for pay-per-mile insurance: Some insurance providers offer a pay-per-mile insurance option, which can be a cost-effective choice for food truck businesses that don’t drive long distances. This option can be particularly useful for businesses that only operate seasonally.

Remember, while it’s important to find affordable insurance, it’s equally important to ensure that the coverage adequately protects the business. Be sure to carefully review policy details and work with a reputable insurance provider that has experience working with food truck businesses.