Food Truck Insurance Policy Information
Food Truck Insurance. Owning a food truck means maintaining an optimal level of business liability insurance in the coverage types that matter most for your specific business model. Sadly, a study in recent years found that up to 57 percent of litigation against businesses involved business with revenue of less than $1 million per year.
Food trucks are vehicles designed to sell quick snacks or meals to walk-up customers. Some sell only frozen or pre-packaged items, while others are equipped with ovens and deep-fat fryers to cook items such as french fries, pizza, sandwiches, or tacos. Some carry ethnic or gourmet cuisine, or specialize in a local delicacy. A food truck may be hired for special events such as fundraisers.
Food truck operators often make the mistake of thinking that their businesses are too small to get sued, but in fact, small businesses take the most heat from litigious clients. Protecting the investment you've made in your business requires a comprehensive food truck insurance policy that protects you from perils.
Food truck insurance protects your business from lawsuits with rates as low as $27/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked food truck insurance questions:
- What Is Food Truck Insurance?
- How Much Does Food Truck Insurance Cost?
- Why Do Food Truck Business Need Insurance?
- What Type Of Insurance Do Food Trucks Need?
What Is Food Truck Insurance?
Food truck insurance is a type of insurance that is specifically designed for food truck operators. It is designed to provide coverage for a wide range of risks that food truck operators may face, including liability for injuries or accidents that occur on the food truck, damage to the food truck itself, and losses from theft or vandalism.
Some of the key components of food truck insurance include liability coverage, which provides protection against claims of bodily injury or property damage that may occur on the food truck. This may include coverage for medical expenses, lost wages, and legal fees. Additionally, food truck insurance may also include coverage for the food truck itself, including protection against damage from collisions, fires, and other types of accidents.
Another important component of food truck insurance is coverage for losses from theft or vandalism. This may include coverage for the loss of food, equipment, and other items that are stored on the food truck. Additionally, food truck insurance may also include coverage for business interruption, which provides protection against lost income in the event that the food truck is unable to operate due to a covered loss.
Overall, food truck insurance is an essential type of coverage for food truck operators, as it provides protection against a wide range of risks that are specific to the food truck industry. This can include everything from liability claims to damage to the food truck itself, and losses from theft or vandalism. With the right coverage in place, food truck operators can operate with peace of mind, knowing that they have the protection they need to keep their business running smoothly.
How Much Does Food Truck Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small food trucks ranges from $27 to $49 per month based on location, size, payroll, sales and experience.
Why Do Food Truck Business Need Insurance?
Food truck drivers need insurance for a variety of reasons, including protecting their business, employees, and customers. Running a food truck is a high-risk venture, as it involves a lot of moving parts, such as cooking equipment, vehicles, and food products. Without proper insurance coverage, a food truck driver could be liable for damages or losses that occur as a result of accidents, natural disasters, or other unexpected events.
Additionally, food truck drivers must comply with local and state regulations regarding food safety and liability, which can require specific types of insurance coverage. Overall, insurance is an essential tool for managing risk and ensuring that a food truck business can operate successfully and sustainably over the long-term.
Another important reason for food truck drivers to have insurance is the potential for liability claims. As a food service business, there is a risk of food-borne illness or injury to customers. If a customer becomes ill or is injured as a result of food served from the truck, the food truck driver could be held liable for damages. Having food truck insurance can provide protection against these types of claims and help cover the costs of any legal proceedings.
Furthermore, food truck drivers need insurance to protect their assets and investment in the business. A food truck is a significant investment and can be costly to repair or replace if it is damaged in an accident. Additionally, the equipment and supplies used to prepare and serve food can also be expensive to replace. Insurance can provide protection against losses due to damage, theft, or vandalism, helping to keep the business running in the event of an unexpected incident.
Food truck insurance is an essential business expense for all types of concession trailer businesses, including food trucks, hot dog carts, flea market vendors, swap meet vendors, and concession stand operators at county or state fairs.
Retailers who operate from kiosks in malls, Christmas tree lots, and newsstands can also benefit from business insurance. food truck insurance should cover your business in the various concession locations, including:
- Parking lots
- Shopping malls
- Business parks
- Bus terminals
- Train stations
- Office buildings
- Rest stops
- Indoor arenas
- Sports fields
- Sea ports
Essentially, any public or private area where your business sets up shop to sell its wares presents a potential for liability to your business. This is true whether your business operates from a primary location or from several different places within the same city, or if it moves from business parks to fairgrounds and beaches.
Concessionaire insurance is a necessary expense and it should reflect the risks that your business takes on during its operation, and regardless of what you're selling - whether it's foods, T-shirts and souvenirs, or other goods.
For concession businesses that sell food or that cater to events and weddings, it's important to stay covered from potential liability at every event and location you work. In addition, local, state, or federal law may also require the purchase of such insurance.
In conclusion, food truck drivers need insurance to safeguard their business and investment, protect themselves against liability, and comply with local and state regulations. Without insurance, they are exposed to the risks and costs associated with running a food service business and can put themselves in a difficult financial situation if something goes wrong. Therefore, it is highly recommended for all food truck drivers to have insurance coverage to safeguard themselves and their business.
What Type Of Insurance Do Food Trucks Need?
The best type of food truck insurance or concessionaire insurance provides coverage from many perils. It may include:
- General liability coverage that protects the business from damages and costs due to an irresponsible action on the part of your business or its employees.
- Product liability insurance that covers damages arising from the serving or selling of products or food.
- Liquor liability insurance that protects your business from claims that occur when an illness or injury is linked back to your business serving alcohol to patrons.
- Business property insurance that covers your truck, trailer, cart and equipment.
- Commercial vehicle insurance that covers liability and damage caused by your business' vehicles.
- Inland marine insurance to protect your products and inventory as you move between locations.
- Worker's compensation insurance to cover the costs of employees who are injured or become ill due to a work-related accident or peril in.
You can tailor the food truck coverage you purchase to suit your business' particular model. A business owner policy, also known as BOP, often provides the coverage that businesses need in one simple policy.
You can work with an agent to find out if your business is protected fully by a BOP or if addendums and additional policies are required.
Food Truck's Risks & Exposures
Property exposures include an office, food storage and preparation areas. Ignition sources include electrical wiring, heating, and air conditioning systems, cooking and refrigeration equipment. Wiring must be up to code, well maintained, and adequate to support the refrigeration units. There may be grills and deep fat fryers used to prepare food going onto the trucks. These must be protected by automatic fire extinguishing protection, hoods, and filters over all cooking surfaces.
The area must be kept clean and grease free to prevent fire spread. Spoilage exposure is high as a small fire or a power outage of even moderate duration can cause all stock to be condemned as unfit for consumption. If operations are seasonal, a loss at the beginning of the season could result in a total loss of income.
Equipment breakdown exposures are high as operations are dependent on the availability of cooking and refrigeration equipment.
Premises liability exposure is minimal as there is little or no public access to the company's base location. Off-premises exposures are at locations that may not be familiar to either customers or employees. Temperatures of hot beverages must be limited to reduce injuries due to scalding. All employees must be instructed in proper customer handling, including how to deal with disgruntled or overly enthusiastic customers. If the food truck operates regularly in a particular location, there should be a contract with the property owner spelling out responsibilities.
Products liability exposure is higher than in an on-site eating establishment because of the time delay between food preparation and serving. Maintaining proper temperatures during transport is vital. Injuries can result from food poisoning, contamination, and allergic reactions. Monitoring the quality of food received, posting of ingredients, and maintaining proper storage temperature can reduce this exposure. Quality control requires limits on the length of time food may stay in holding areas before being destroyed. The stock should be regularly rotated so older products are used first. Out of date stock must be removed on a regular basis and discarded.
Workers compensation exposures come from slips, falls, cuts, puncture wounds, burns, back sprains, and hernias from lifting. The employees tend to be minimum wage and turnover may be high, particularly if the food truck operates on a seasonal basis. In any retail business, hold-ups are possible so employees should be trained to respond in a prescribed manner. Anhydrous ammonia refrigerants are poisonous when leaked into confined spaces like coolers. There should be adequate controls in place to maintain, check, and prevent such injury.
Crime exposure is from employee dishonesty and theft of money and securities. The low cost of the items being served can result in a significant amount of cash accumulating. The money should be regularly removed from the cash drawer and moved away from the front of the food truck.
Closing time is the most vulnerable time for hold ups so security procedures should be in place. Some trucks refuse to accept cash as a way to control this exposure. Background checks should be conducted on all employees handling money. There must be a separation of duties between persons handling deposits and disbursements and handling bank reconciliations.
Inland marine exposures include computers, goods in transit (food), and valuable papers and records for suppliers' information. Goods in transit can be damaged by collision, fire, spoilage, and theft. Backup copies of all records, including computer records, should be made and stored off premises.
Commercial auto exposure is moderate due to the size of the vehicle and the need to maneuver that vehicle through congested urban areas. Trucks with cooking devices can catch on fire or explode. The trucks may operate in congested parking lots or in residential areas where children may be present. Video devices that reveal people behind the truck can be very helpful in preventing injuries.
If vehicles are provided to employees, there must be a written policy regarding personal and permissive use. All drivers must have an appropriate license and acceptable MVRs. Vehicles must be maintained, and records kept in a central location.
Commercial Insurance And Business Industry Classification
- SIC CODE: 5812 Eating Places
- NAICS CODE: 722330 Mobile Food Services
- Suggested Workers Compensation Code(s): 9083 Restaurant: Fast Food
Description for 5812: Eating Placess
Division G: Retail Trade | Major Group 58: Eating And Drinking Places | Industry Group 581: Eating And Drinking Places
5812 Eating Places: Establishments primarily engaged in the retail sale of prepared food and drinks for on-premise or immediate consumption. Caterers and industrial and institutional food service establishments are also included in this industry.
- Automats (eating places)
- Box lunch stands
- Buffets (eating places)
- Carry-out restaurants
- Coffee shops
- Commissary restaurants
- Concession stands, prepared food (e.g., in airports and sports arenas)
- Contract feeding
- Dairy bars
- Diners (eating places)
- Dining rooms
- Dinner theaters
- Drive-in restaurants
- Fast food restaurants
- Food bars
- Food service, institutional
- Frozen custard stands
- Grills (eating places)
- Hamburger stands
- Hot dog (frankfurter) stands
- Ice cream stands
- Industrial feeding
- Lunch bars
- Lunch counters
- Oyster bars
- Pizza parlors
- Refreshment stands
- Restaurants, carry-out
- Restaurants, fast food
- Sandwich bars or shops
- Snack shops
- Soda fountains
- Soft drink stands
- Submarine sandwich shops
- Tea rooms
- Theaters, dinner
Food Truck Insurance - The Bottom Line
To find out exactly what type of food truck insurance you need and how much coverage you should have, speak to a commercial insurance agent to go over your all your options.
Additional Resources For Commercial Auto Insurance
Learn about small business commercial auto insurance which includes liability and physical damage protection for vehicles that are used for business purposes.
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Commercial auto insurance is a type of insurance that provides coverage for vehicles used for business purposes. This includes vehicles such as delivery trucks, company cars, and other vehicles that are used to transport goods or employees.
Commercial auto insurance is necessary for businesses that rely on their vehicles to conduct their operations. It helps to protect the business from financial losses due to accidents, theft, or other unexpected events. It also helps to protect the business from potential lawsuits that may arise from accidents involving their vehicles.
There are several types of coverage options available under business auto insurance policies. These include:
- Liability coverage, which covers damages or injuries that you or your employees cause to others while operating a business vehicle.
- Physical damage coverage, which covers damages to your own vehicle, is also available.
- Other coverage options may include medical payments, uninsured or underinsured motorist coverage, and rental reimbursement.
It is important for businesses to carefully consider their commercial auto insurance needs and to choose a policy that offers the right level of coverage. This can help to ensure that the business is protected in the event of an accident or other unexpected event.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Accounts Receivables, Computers, Motor Truck Cargo, Valuable Papers and Records, Employee Dishonesty, Money and Securities, General Liability, Employee Benefits, Umbrella, Motor Carriers Liability and Physical Damage, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Flood, Mobile Equipment, Signs, Warehouse Operators' Legal Liability, Cyber Liability, Employment-related Practices, Environmental Impairment, Underground Storage Tank, Stop Gap Liability and International Coverages.