From vibrant food festivals to street fairs and breweries, food trucks have carved out a niche offering culinary delights on the go. As this dynamic industry continues to expand, so does the complexity of running a mobile food business.
Along with regulations and other considerations, insurance is a critical element that food truck owners should not overlook. There is a unique set of risks associated with operating on the go, and this type of coverage is critical for protecting your finances and livelihood.
Today, we explore the world of food truck insurance, with a special focus on breaking down the costs involved. By the end of this blog, you will have a better understanding of the cost of food truck insurance and why your business needs this type of coverage.
What is Food Truck Insurance?
Food trucks have become increasingly popular in recent years. In fact, the experts at IBISWorld emphasize that the Food Trucks industry is one of the best-performing segments in the broader food service sector. This is in large part due to their ability to provide unique food at unique, high-quality food at lower prices than a sit-down restaurant.
This industry is also made more attractive due to relatively low barriers to entry and high consumer demand. However, this varies from city to city.
Of course, operating a food truck isn’t all fun and games. Many potential risks come with a mobile food venture – spanning from harm or injury caused by drink and food-borne illnesses to vehicle accidents. Food truck insurance helps protect food trucks and carts from many of the perils they’re exposed to.
This form of commercial insurance is tailored to meet the insurance needs of food trucks. Most policies include a combination of affordable coverages, which can usually be customized for a business's unique situation.
Who Needs Food Truck Insurance?
Food trucks are not the only types of businesses that should consider this coverage. At World Insurance, we recommend that any business that serves food or beverages from a mobile truck, cart, or trailer should consider getting food truck insurance.
This includes:
- Gourmet food trucks
- Ice cream trucks and bikes
- Hot dog and hamburger cars
- Event concessionaries
- Restaurants with food trucks
These kinds of businesses need this type of coverage to protect themselves and get contracts. Without food truck insurance, vendors may have a hard time getting permits to operate.
Learn more about whether a food truck policy is right for your business.
Benefits of Food Truck Insurance
Food truck insurance policies offer a variety of coverage options that are ideal for this unique business model. Some of the common coverages these policies offer include:
- General Liability Coverage: This is basic protection against so-called “slip and fall accidents,” as well as libel, slander, and false advertising claims. Any business, even mobile vendors, can benefit from this coverage.
- Commercial Auto Coverage: If your food truck can drive on the road, you will need this type of coverage to protect against accidents.
- Business Property Coverage: Perhaps you have a trailer or food cart that doesn’t go on the road. This coverage is used to protect buildings and land but can also be purchased as part of a food cart policy to insure equipment like a cart or trailer.
- Inland Marine Coverage: Protect your equipment and inventory while it’s being transported between locations.
- Product Liability Coverage: Any business serving food should have this coverage to protect against illness (such as food poisoning) or injury.
- Liquor Liability Coverage: Similarly, any business that serves alcohol may be legally required to have this specialized coverage which extends protection to alcohol-related incidents.
A comprehensive food truck insurance plan not only protects your income and future earnings, but also your essential equipment, inventory, and truck (or cart) itself.
A Breakdown of Food Truck Insurance Costs
With all of this in mind, one question remains: How much does insurance cost for a food truck?
Ultimately, the answer varies. As is the case with most types of insurance, insurers take many factors into account when they set premiums for food truck insurance policies.
Factors That Affect Food Truck Insurance Costs
That being said, insurers will often consider a few key factors when determining food truck liability insurance costs. These include, but are not limited to:
- Operating Locations: Where you serve your customers can significantly impact your insurance rates. High-traffic urban areas might pose a greater risk of accidents. Operating in areas prone to natural disasters (like flood zones) can also increase premiums.
- Food and Beverage Offerings: Insurers will also want to know what types of food and drinks a vendor offers. For example, serving alcohol may increase liability risks, and preparing foods with a higher risk of foodborne illness could impact premiums.
- Customer Volume: A higher number of customers generally indicates increased activity and, consequently, a higher likelihood of incidents that could lead to claims.
- Type of Vehicle: Whether you have a truck, trailer, or cart can also affect the cost of food truck insurance. The cost to insure a large, fully equipped food truck might be higher than for a smaller trailer or cart. Insurers may also take the condition or age of the vehicle into consideration.
- Claims History: This is a common risk assessment. A history of filing insurance claims can indicate a higher risk to insurers. Businesses with no claims or few claims may benefit from lower rates.
- Chosen Coverages and Limits: Of course, the variety and extent of coverage you choose will directly impact your insurance costs. Basic policies will be less expensive than comprehensive coverage that includes general liability, property damage, workers' compensation insurance, etc.
Understanding these factors can help you better anticipate your insurance expenses and possibly find ways to mitigate them. All that being said, food truck insurance costs are relatively affordable. Especially considering the peace of mind and protection this type of coverage provides.
At World Insurance, our professionals can tailor a plan specifically for your business and unique liabilities. These include lawsuits from negligent service of alcohol, food sickness, property damage, equipment failure, reputational risks, and food or drink contamination.
Enjoy your business knowing you have the right protection. Learn more about your options for food truck insurance today!