Food trucks are a popular business choice and can be a great way to start a business or expand an existing restaurant, but there are unique risks and hazards to contend with when you operate a mobile business. Business insurance can provide financial protection that will help your business cope with unforeseen incidents, and this coverage may be required before you can participate in events, as well.

What insurance coverage do I need for my food truck business?

There are many types of insurance coverage to consider, but these policies are particularly relevant to food trucks:

Commercial Auto Insurance

When you operate a food truck, your vehicle will need to be insured by a commercial auto insurance policy. This covers third-party bodily injury and property damage if the driver of the vehicle is at fault in an accident, as well as the value of the vehicle itself if it’s damaged by a collision or another peril. 

Most commercial auto insurance policies cover permanently attached equipment, like stoves and burners, as well as the vehicle itself. To receive coverage, you will need to include the value of the equipment along with the value of the vehicle when you purchase a policy. It’s important to note that commercial auto insurance does not cover any equipment that is not permanently attached to the vehicle, such as food inventory, utensils, or iPads.  

If your food truck is actually not a truck itself but a separate trailer that is towed by another vehicle, you’ll need to secure commercial auto insurance for the vehicle used for towing and may need to add an endorsement to your policy to cover the trailer. 

Example:

• One of your employees is driving your food truck to a sporting event when he makes an illegal left turn and collides with another vehicle. Your commercial auto insurance would cover damages to both vehicles.

Commercial Property Insurance

Commercial property insurance can protect the value of your business property, including buildings and their contents. If your food truck owns or leases a commercial kitchen space, commercial property insurance can provide coverage for that property and any equipment, appliances, or inventory you have inside. Property insurance provides funds to repair or replace business property that is damaged by covered perils, which often include fire, storm, vandalism, explosion, and water damage. 

Commercial property insurance can also provide coverage for stationary food trucks or trailers that remain parked in one location and don’t move from location to location. In order to cover your food truck that is mobile, you can secure coverage through commercial auto insurance. 

Some commercial property policies will also allow you to add a “property in transit” or inland marine insurance endorsement to cover your business personal property that is not permanently attached to your food truck. This would provide coverage for tools, supplies, food inventory, and equipment that is not built into the vehicle. If you already have a commercial property policy, it may be most convenient to simply add an endorsement to your existing property coverage. 

Example:

• A fire breaks out on a stove in your food truck and spreads, damaging the iPads you use to take orders. Because you have an endorsement for property in transit, your commercial property insurance would pay to replace the damaged items. 

Inland Marine Insurance

Inland marine insurance is designed to protect the property that you transport to various locations that may not be covered by a standard commercial property policy. For food trucks, this type of coverage is an alternative to commercial property insurance. It will cover your business personal property that travels with your food truck and is not permanently built into the vehicle, including food inventory, equipment, tools, and technology. Food truck businesses may consider choosing this type of policy if they do not have a permanent location and do not need a traditional commercial property insurance policy. 

Example:

• Your food truck is involved in an accident that damages electric griddles, deep fryers, and tablets used for taking orders. Because these items are not permanently attached to the vehicle, your commercial auto insurance will not cover them. Your inland marine insurance policy will reimburse you for the loss. 

General Liability Insurance

General liability insurance covers accidental damage to third parties and property belonging to third parties. If your employees accidentally cause someone else injury or damage their property in the course of your work, this coverage will protect your business. If your business is sued, general liability insurance can cover legal fees and damages and even medical payments in the case of an injury. 

General liability insurance contains coverage for products and completed operations liability, which can protect your business from unintentional third-party injury or damage that your products cause. In the case of food trucks, this can refer to the food you sell to customers. If a customer becomes ill from your food, they may sue, in which case, general liability can provide coverage.

General liability can also cover non-physical personal and advertising injuries such as libel, slander, or copyright infringement.

Examples:

• Bodily injury: Your food truck has a bin full of ice and beverages where customers can grab a drink to go. A customer who is grabbing a drink cuts his hand on a glass bottle that had somehow shattered in the bin of ice. General liability insurance would provide medical coverage for the customer and legal expense coverage if you are sued.
• Products and completed operations: A customer severely burns his tongue and mouth drinking a hot cup of coffee that your food truck sold him. He sues your business. General liability insurance would provide coverage.
• Personal and advertising injury: You paint your food truck with a new mascot character. Unfortunately, the mascot looks very similar to work created by a professional artist. The artist sues for copyright infringement. Your insurer would cover the lawsuit and any resulting settlement.
  

Workers’ Compensation Insurance

When employees work in a fast-paced and physically demanding food truck environment, there is a risk that they could be injured. Workers’ comp provides funds to cover employees’ medical expenses and lost income if they are injured or fall ill as a result of their work. Some states also provide funds for vocational training and job placement for injured employees. In the event of a work-related death, workers’ comp can provide benefits for the employee’s surviving dependents. 

In almost all states, workers’ compensation is legally required for companies who employ others. Most states require you to obtain workers’ comp as soon as you hire your first employee, but requirements can vary depending on each state’s specific regulations. Violating workers’ comp laws can lead to large fines or even criminal charges, so it’s important to ensure that you have adequate coverage for your employees. 

Example:

• One of your employees sustains a severe burn while handling a deep fryer. Your workers’ compensation insurance would pay for her medical expenses and a portion of her lost income while she is unable to work. 

Equipment Breakdown Insurance

Food trucks rely heavily on equipment such as refrigerators, freezers, ovens, and commercial stoves. If this equipment fails, it can have a substantial impact on your ability to operate your business. Although some business owners may believe that commercial property insurance would cover these situations, equipment breakdowns are typically excluded from commercial property coverage. Equipment breakdown insurance can step in to provide funds to repair or replace damaged equipment, cover lost business income while the equipment was out of commission, and replace spoiled food. 

Example: 

• Your food truck’s stove fails, and you are unable to operate until it is repaired. Your insurer would pay for you to repair or replace your stove and reimburse you for lost income. 

Commercial Crime Insurance

Food truck businesses may be more vulnerable to crime as they deal largely in cash transactions, and their valuable property frequently moves and lacks the security a permanent physical space can provide. Commercial crime insurance can protect against financial losses caused by theft, robbery, burglary, fraud, and forgery. This coverage protects against third-party crime as well as employee dishonesty. 

Example:

• A seasonal employee of yours has stolen $1,200 from your cash register. You are unable to locate the employee and the cash is as good as gone. Your commercial crime insurance would cover your losses.

Additional Coverages

• Business income coverage will reimburse you for lost income and operating expenses if your business is forced to close due to a covered peril, such as fire, storm damage, or other property damage.
• Liquor liability insurance is necessary if your food truck serves alcohol. This coverage will protect your food truck if you are held liable after a customer becomes intoxicated and causes bodily injury or property damage.
• A business owner’s policy (BOP) combines general liability, property, business income, and extra expense coverage into a single package. For small or midsize companies, this type of insurance could help you obtain a wide range of coverage. Premiums for a business owner’s policy are typically cheaper than the cost of buying each coverage separately.

Pricing and Quotes

Pricing for food truck insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:

• Business size
• Industry
• Location
• Number of employees
• Claims history

Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a food truck with a history of frequent claims will face higher premiums. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.

In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer coverage for food trucks:

Provider	General Liability	Business Owner's Policy	Product Liability
CoverageSmith	??	??	??
CoverWallet	??	??	??
Hiscox	??	??	??
Thimble	??	??	??
Embroker	??	??	??

Final Word

When you run a food truck business, it’s necessary to prepare yourself for the unique risks that your business will face. Common incidents such as automobile collisions, fires, and customer injuries could have a devastating effect on your company. With a comprehensive range of insurance policies to provide financial support, you can ensure that your food truck will be able to survive any unexpected disasters that arise.