Food Truck Business Insurance
Getting insurance for your food truck is essential.
Food trucks need to be protected against things like claims arising from employment disputes, contractual breaches, and parking and zoning violations.
For example, you get into a road accident while driving your food truck, or customers contract food poisoning after eating food from your truck.
We’ll help you find the most personalized and affordable coverage for your unique business.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for a Food Truck Business
General liability insurance is — generally speaking — one of the most important insurance policies for food trucks.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
Since your food truck will face a multitude of risks, it is often wise to bear in mind some additional policies that will bolster your protection, including:
- Product liability insurance for the food and/or beverages you sell from your truck
- Commercial auto insurance for the truck itself (or trucks, if you have more than one)
- Commercial umbrella insurance to extend the limits of your other insurance policies
- Workers’ compensation insurance for any employees you hire in the event they need time off due to on-the-job injury or illness
There are two principal types of insurance providers for you to be aware of when shopping for your coverage:
- Traditional brick-and-mortar insurers
- Online insurers
For new and small businesses, online-based insurers (e.g., Tivly and Next) are typically the best option because they offer a great option for acquiring reliable insurance at budget prices.
While traditional insurance providers tend to be better known, this does not necessarily translate to better value for policies — especially with the advent of AI lowering the barrier to entry.
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Cost of General Liability Insurance
On average, food trucks in America spend between $450 - $1,000 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for a food truck business to other professional industries using the graph below:
Several factors will determine the price of your policy. These include your:
- Location
- Deductible
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.
A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
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Common Situations That General Liability Insurance May Cover for a Food Truck Business
Example 1: A business is considering having your food truck parked outside of their building every weekday for its employees. First, the business owner wants to tour your truck. While he is inside, he trips over a box and breaks his wrist. He asks you to pay for his medical treatment. Your general liability insurance will likely cover this cost.
Example 2: A competitor does not like your latest marketing campaign. He sues you, claiming that you have libeled his business. Your general liability insurance will cover your legal fees.
Example 3: One of your employees is loading supplies into your truck when he accidentally knocks a customer to the ground. She breaks her arm and sues your business. Your general liability insurance will pay for your legal defense, including paying a settlement if needed.
Other Types of Coverage Food Truck Businesses Need
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:
Product Liability Insurance
There is always the chance that one of your customers could sue your business, claiming that one of your products caused him or her injury. If this happens, your product liability insurance will pay for your legal fees. It will also pay for a settlement if you need to settle out of court.
Commercial Auto Insurance
Your food truck is a vehicle, and vehicles used primarily for business need to be covered by a commercial auto policy. Your policy will pay for damages to your vehicle if you are in an accident as well as for damage to other vehicles if you are at fault.. It will also pay for medical treatments for any injured.
Commercial Umbrella Insurance
An umbrella policy provides extra protection beyond what a general liability insurance policy offers. It is possible for your general liability insurance limits to be exceeded—like if you lose a big lawsuit. If this happens, your umbrella policy will kick and pay until its limits are reached.
Workers’ Compensation Insurance
A workers’ compensation policy is necessary in most states if you have employees. The policy you carry will pay for medical treatment if one of your employees is injured while performing work-related duties. It will also pay for some of the lost wages for the employee if they cannot work due to the injury.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.
Here are several things you can do to better protect your food truck business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Maintain your corporate veil.
Food Truck Business Insurance FAQ
Can I buy business insurance online for my food truck business?
Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.
What is included in a business owner’s policy?
A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
What is the difference between business insurance and general liability insurance?
"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
Do I need insurance before I start a food truck business?
When it comes to protecting your food truck from the many possible liabilities it will face, early acquisition of business insurance is essential because it cannot be purchased retroactively.
Since you will be operating out of a vehicle, you will likely even be required to purchase a commercial auto policy to operate legally in your state.
Will insurance protect my food truck business from everything?
Not necessarily. Certain exceptions may be written directly into your food truck business insurance policy, and some perils may be entirely uninsurable.
Do I need business insurance if I already have an LLC?
Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.
An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.