Food truck insurance covers a broad range of risks, including various liabilities from business operations, employee injuries, and damage to the food truck or business property from vandalism, accident, or theft. Not only do food trucks fall into the high-risk category of restaurants and food prep where fires and food-borne illness are concerns, but they are on the road increasing the chance of vehicular accidents. The most common food truck claims are theft, fire, and equipment breakdown. Food trucks are a big target for theft due to insecure locations to store food trucks when not in use. Fire claims are common, as is equipment breakdown leading to spoilage and the inability to sell products. The coverage options available within a policy allow a food truck business to tailor insurance to its specific needs.
Factors insurance companies use to determine food truck insurance costs include:
Type of business
Location of business
Value of the business property
Employee payroll
Coverage amount
Replacement cost vs actual cash value (ACV)
Deductibles
Type of business: Food truck businesses carry more risks than others. Because the risks of individual businesses vary, the total cost of insurance can be higher in some cases.
Location of business: You’ll likely have a permit to do business in a particular location. If this location is in or near a high-crime area, for example, your insurance premium may be higher. Know Why is Fleet Management Crucial for Long Haul Trucks?
Value of the business property: Although the equipment needed for your food truck can total $10,000 or more, these costs are not always significant for all small businesses.
Employee payroll: Workers’ compensation premiums are based on payroll costs and the types of work that employees perform. See the List of countries contributing to the success of usage-based insurance.
Coverage amount: If you choose minimal coverage, premiums will generally be lower. Higher coverage amounts translate to higher premiums.
Replacement cost vs actual cash value (ACV): Insurance premiums will be higher if you choose replacement cost coverage rather than the cash value of your equipment.
Deductibles: Higher deductibles translate into lower premiums because you take on greater financial risk.
Following are Covered in a food truck policy:
Workman’s Compensation Insurance
Commercial Vehicle Liability
1. Workman’s Compensation Insurance
If you have at least one employee or more you must insure your workers through a Worker’s Compensation insurance policy. This policy pays for medical care, lost wages, and more for an employee who has a work-related injury or illness.
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2. Commercial Vehicle Liability
This policy works just as a private automobile insurance liability policy. The difference is that it covers any vehicle owned by your food truck company such as your own car or an employee’s car being used for the benefit of your company. It protects you, your company, and the driver from the legal liability that may occur when vehicles used to fulfill business needs are in a crash. It also saves business property from vandalism, accident, or theft.
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