Opening a food truck is one of the most popular entrepreneurial ventures right now, and while it’s certainly less daunting than starting a full restaurant, there’s plenty of pre-planning required.
One often-overlooked part of the startup process is getting the proper insurance for your food truck. Investing in insurance is absolutely critical and well worth the investment, because you’ll be covered if any mishaps related to your truck or business happen.
What is Food Truck Insurance?
Food truck insurance keeps your business covered in the event of lawsuits, accidents, injuries, temporary closures, or damaged equipment. Like any other kind of insurance, there are different policies available that have varying amounts of coverage.
What’s Covered By Food Truck Insurance?
A comprehensive food truck insurance policy contains many types of business insurance covering a range of potential risks. The most common option is called a business owner policy (BOP), which is a bundle of three essential types of insurance: general liability, commercial property, and business interruption. A BOP allows you to combine these policies for a more affordable price than purchasing each of them separately.
General Liability Insurance
This type of insurance covers property damage and injuries of a third party (anybody who is not affiliated with your business). If customers are harmed in any way, for example if they get sick from eating food you served to them, general liability insurance will cover the costs.
Commercial Property Insurance
This type of insurance covers damage to equipment or your physical location. Most policies only cover a specific type of damage, so it’s important to make note of the exact details before choosing a policy. Commercial property insurance policies will usually cover weather-related damage, burglary, theft, or fire damage.
Business Interruption Insurance
If your business is interrupted or has to close temporarily, this type of insurance will help cover the resulting losses. Like commercial property insurance, business interruption insurance only applies to certain types of events, which vary depending on the policy.
One of the most common reasons for a business interruption is any type of major damage that causes you to have to close your food truck for repairs. In this event, business interruption insurance will help you pay for operating costs until you can reopen.
What Are the Other Types of Food Truck Insurance?
Commercial Auto Insurance
Every automobile is subject to this type of insurance. Here’s what is normally covered by the policy:
- Third-party bodily injuries
- Third-party property damage
- Combined single limit (CSL) for combined property damage and bodily injuries
- Personal injury protection (PIP) for the business operators’ medical bills in case of a truck accident
- Uninsured motorist coverage for accidents caused by a driver with inadequate insurance
Not only does commercial auto insurance protect your truck in the event of an accident, it also provides coverage for damage to any attached appliances and equipment in your vehicle.
Commercial Umbrella Insurance
This policy adds protection to general liability insurance. For example, if you are sued for $700,000 in damages and your insurance caps at $400,000, the insurance will cover the additional $300,000.
Equipment Breakdown Insurance
This policy covers food truck equipment such as freezers, grills, and refrigerators in the event of an unexpected breakdown. The insurer will either provide a replacement or pay for repairs. This does not cover normal wear and tear of your equipment.
Start Your Food Truck Journey with Legion
Ready to begin your journey as a new food truck owner? At Legion Food Trucks, we specialize in bringing your dream food truck business to life — all the way from concept to construction. Contact us today to get started!
