The popularity of food trucks is officially soaring in the U.S., as there are more than 30,000 of them now rolling deliciously around neighborhoods nationwide. Offering their tasty goods to patrons for lunch away from the cubicle and patios everywhere, they fulfill a niche desire that allows people who are already out on the town to indulge in their favorite type of cuisine. Seeing a business like this successfully get up off the ground is quite a daunting task and requires as many as 40 separate government approvals and more than $20,000 in licensing and compliance charges.

It may seem like there is more red tape involved than a profitable experience should need to endure, which is why it can be simple to lose foresight when it comes to food truck insurance. A sensible business insurance policy can prevent you from accidentally encountering full financial peril. Whether you’re serving up frozen yogurt, street tacos, or amazing grilled fare, here are some tips directly from our experts at the Alexander insurance agency of Saint Charles to help obtain adequate coverage.

What is Food Truck Insurance?

Food truck insurance is technically a small business insurance policy that can be customized to cover the specific risks that are involved with your taste bud-tempting task. Adequate food truck insurance policies offer several types of coverage that will protect you from issues such as lawsuits, lost income, equipment breakdowns, and outright accidents.

What Does Food Truck Insurance Cover?

The food truck insurance policy that covers all the bases contains several types of business insurance that shield you from a variety of problems. An ideal starting place is with a business owners policy, which bundles 3 essential coverage types and is less expensive than acquiring each type of coverage separately. Here are the vital components of what business liability insurance includes:

Business Liability Insurance:

This is the most vital component of a small business insurance policy. General liability insurance covers property damage and bodily injuries that are accidentally inflicted upon others. One example is running a chauffeur or party bus, wherein spilling a beverage on someone which could incur urgent care or other medical expenses.

Commercial Property Insurance:

Commercial property insurance will cover your business’s physical location and its much-needed equipment if it’s damaged by a covered event such as fire or inclement weather. If a fire destroys your office, commercial property insurance will pay to provide new equipment that you rent or lease, such as furniture, vital tools, inventory for sale, supplies, and business records. 

Business Interruption Insurance:

Unfortunately, some instances require your business to shut down temporarily if you have a fire or burglars break into your property. Business interruption insurance will replace the income you have lost, then will even cover money lost due to damaged merchandise. You may have to move to a new location temporarily, and this will ease your mind by covering that expense as well.

Other Types of Food Truck Insurance:

The business owner’s policy is the most important component of your food truck insurance regimen, but you’ll want to acquire other insurance types that will help with a variety of other issues that you will face During daily operations. Here are some of the common types to consider:

Commercial auto insurance:

Since the food truck is essentially a food proprietor on wheels also used for business purposes, a commercial auto insurance policy will be required instead of personal driver’s coverage. Here are some of the very common types of commercial auto insurance that will be sufficient for a food truck:

• Bodily injury liability: this covers injuries that can occur on or around the truck that stem from you or your employees’ actions.
• Property damage liability: this will cover property damage to others accidentally caused by you or your employees. Events that take place on golf courses, private residences, and patios of bars are all examples of where this will aid you. 
• Combined single limit: this is the combination of one overall limit for property damage along with bodily injury claims against you as opposed to the option of procuring 2 separate limits.
• Medical payments and personal injury protection: this covers you and your necessary medical bills that can accumulate after an accident, no matter who was at fault.
• Collision insurance: this type of coverage will take care of the costs of providing repairs or completely replacing your vehicle if you are in a crash. It can also cover your attached appliances for cooking and other food truck equipment.
• Comprehensive insurance: this will cover the cost of replacing the repair of the vehicle for events such as fire, floods, vandalism, and falling objects. It will also cover the appliances such as ovens and dishwashers along with various other items of equipment.
• Uninsured motorist coverage: this will cover injuries to you and your passengers if a driver without car insurance or someone without adequate coverage suddenly crashes into you. In some states, you were able to purchase this type of coverage that will even cover you if the offender has no insurance at all.

Equipment breakdown insurance is an excellent add-on that can cover the cost of replacing or repairing your preparation equipment if it breaks down on the spot. This type of coverage does not help with normal wear and tear, but if your business has just become very popular and this event occurs to you, you’re really going to benefit from this form of coverage.

Food spoilage and contamination insurance we’ll cover your perishable stock of food from prolonged power outages or unexpected equipment breakdown. Also, this will provide for the recovery of your business if you undergo an outbreak of a contaminating illness. This coverage can help you with advertising to regain your reputation, the income you’ve lost, thorough cleaning of your equipment, at any chest or vaccinations you might need due to the event.

How much does food truck insurance cost?

On average, most food and beverage business owners pay about $135 per month for a business owners policy, and around $170 a month for commercial auto insurance coverage. Having a higher coverage amount means higher insurance premiums, and as you don’t want to leave your pride and joy underinsured, you also don’t want to pay out of pocket for more coverage than you will ultimately need. If it takes more than one employee to run your food truck, you will run into higher prices there as well. The provider who ultimately covers you will look at cost factors such as property owned, business assets, your payroll size, and what locations you are serving.

Food trucks have become another awesome break from work, weekend splurge, and way for neighborhood dwellers from all walks of life to check out something they may have not enjoyed before. If you have just made the choice to launch a food truck venture, reach out to us here at the Alexander Insurance of St. Charles and we can assist you with the plan to ensure very smooth and always delicious sailing!