Food truck brings fast food to your neighborhood, but food truck insurance can help make sure your catering business stays protected even if its always on wheels.
Every city in the United States has got an iconic food truck that mysteriously appears at touristy hotspots and hipsters’ favorite locations. A food truck is a hamburger joint on wheels.
A practical crossbreed of a camper and a fast-food kitchen, a food truck is also quite risky to operate. Therefore, it needs to be covered by an adequate insurance package. Let’s think for a minute.
If it’s a truck used for business, it’s going to need a commercial auto insurance policy. But it is also a business entity, so it must have a valid general liability policy. Every food truck carries kitchen staff, so they are going to need a workers’ comp insurance policy.
As a shortcut to doof truck insurance you could try business owner’s policy that combines different food truck insurance products into one package.
Finally, because food trucks sometimes sell beer with their meals, the owner may also opt for liquor liability insurance. Let’s look at each of these insurance policies more closely, quoting its average cost per year.
Who needs food truck insurance?
In addition to mobile food trucks, the insurance policies listed above are suitable for lunch trucks, catering trucks, and ice cream trucks. Some trucks are completely self-service. They are giant vending machines on a truck’s chassis, but they also need appropriate insurance coverage.
Because vending trucks are self-service small businesses, they should be protected by vandalism and malicious mischief insurance. There are also concession trailers that need even more tailored commercial insurance solutions.
There are BBQ trailers, regular pizza trailers, and brick oven pizza trailers, Pretzel trailers, smoker trailers, Donut & Dessert trailers, Trailer bars, to name just a few.
All of these small businesses on wheels carry products worth thousands of dollars while cooking and serving delicious fast food. All the stuff that is not attached to the food trucks needs to be covered by a so-called Content Insurance Policy.
How much does a food truck insurance package cost?
There isn’t a universal price, really. The cost of food truck insurance depends on the policies you choose and the insurer you purchase them from. When calculating the average annual cost of your food truck’s insurance package, you should consider the specific risks that your small business is exposed to, plus the value of the equipment and the operational costs.
There are four insurance policies that you really need to have. Their prices vary as follows:
- General Liability: its cost ranges from $300 to $800 a year for a coverage of $1,000,000 and 0 deductible.
- Business Auto Insurance: that’ll cost you between 1,500 and $3,000 a year. The typical coverage is $250,000, and the deductible amounts to $500
- Workers’ Compensation Insurance: the annual premium costs between $1,000 and $1,500 for $1,000,000 coverage and zero deductible
- Contents Insurance: the premium costs between $300 and $1,000 a year for $25,000 coverage and $0 deductible.
You can also purchase the special Business owner’s policy costs for food trucks. The annual premium costs $1,300 on average. This policy combines general liability insurance and property insurance. Occasionally, the bundle may include a business interruption insurance policy.
Food Truck Insurance Policies Explained
Let’s look more closely at the business insurance options mentioned above and see how exactly each one of them protects your food truck business.
Food Truck Insurance General Liability
General liability shields your mobile business from incidents and accidents involving third parties when your food truck makes and sells food somewhere.
The insurance coverage extends, but it is not limited to food poisoning, food-related diseases, tongue, and inner mouth scalding, accidental cuts, and possible allergic reactions. The general liability insurance also covers accidents around your food truck that your customers may suffer: slip-and-falls and weather-related injuries to customers or passers-by.
Finally, a general liability insurance policy protects your food truck business against advertising lawsuits related to misleading marketing campaigns, as well as any property damage caused to a third party’s building or property by your food truck. Any legal fees and court representation is covered by standard general liability insurance regardless of the outcome.
Food Truck Insurance Commercial Auto Insurance
Commercial auto insurance covers your food truck from liabilities and damages that may arise while it drives from one location to another. The business auto insurance policy shields your motor kitchen from any physical damage to the unit and the items permanently attached to it. When signing up for a a business auto insurance policy, make sure that it includes these three essential types of coverage:
- Collision coverage
- Liability coverage
- Comprehensive coverage for not-at-fault incidents
Food Truck Workers’ Compensation Insurance
This insurance is essential for mobile food businesses that have employees. Its coverage extends to job-related incidents, accidents, and illnesses and the ensuing medical bills; long-term or permanent disability payments to insured employees; death benefits to family members of insured employees who died on the job.
In most states, the Occupational Safety and Health Act (OSHA) requires that all mobile food businesses hold a valid workers’ comp insurance policy.
Contents Insurance
The most popular food trucks in the United States carry kitchen equipment worth thousands of dollars. Contents Insurance covers all items that are in your food truck without being permanently attached to the unit. You can also come across this type of policy as Business Property Insurance.
There are two types of Contents Insurance policy that you can purchase: cash value policy and replacement cost value.
The former reimburses the small business owner with the cost of the product minus depreciation, while the latter covers a new product’s price. As a rule, replacement policy premiums are costlier.
Forming an LLC
More often than not, food truck businesses operate as LLCs as a business structure that is not only tax-efficient but also separates your personal finances and liability from your business should something go wrong.
Setting up a food truck LLC is not as hard as you may think, especially you have a reliable partner like ZenBusiness (review) by your side.
ZenBusiness will guide you through all the paperwork and procedures related to forming an LLC. Contact the company’s experts now and ask for an LLC formation quote.