15 Best Insurance Tips for Food Truck Business

Food truck insurance: If you’re starting a new business, then you need business insurance. It’s as simple as that. The protection offered by an LLC will protect your personal assets, but your business’s assets are still open to liability in the case of a lawsuit or other loss. Be sure that everything you’ve built is safe by getting business insurance.

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Food truck insurance

Food truck insurance: BusinessHAB.com

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1. 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.

General liability insurance is — generally speaking — one of the most important insurance policies for food trucks.

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2. 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

Food truck insurance

3. 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.

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 other types of insurance all food trucks should obtain:

Food truck insurance

5. 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.

6. 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.

Food truck insurance

7. 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.

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8. 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.

Food truck insurance

9. 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.

10. 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.

Food truck insurance

11. 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.

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12. 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.

See also: Kentucky Farm Bureau Insurance: What You Need To Know

Food truck insurance

13. 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.

14. 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.

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Food truck insurance

15. 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.

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