Thousands of food trucks serve customers in hundreds of cities across the country. If you’ve spent any time in Los Angeles, Washington DC or one of the other cities with over 100 food trucks, you probably have eaten at one. If you’re tempted to start your own food truck business, don’t forget about some of the most important parts of business: Market research data from 2015 says that about 26 percent of a food truck’s costs are for things like insurance, permits and repairs. Before hitting the road, make sure your business is protected with the right insurance.
Insurance for the Truck
Just like your personal car is insured to help pay for costs if you cause an accident, your food truck also needs liability car insurance. This pays for costs if you or an employee causes an accident where someone else is hurt or property is damaged. The most basic commercial auto liability insurance has two parts:
• Bodily injury liability, where the insurance company helps pay the medical bills of someone you or an employee injures while driving the truck
• Property damage liability, to pay for repairs to someone else’s property
Commercial auto liability insurance also pays court costs if your business is sued for injuring someone or damaging property. However, this insurance does not pay for your truck’s repairs or your own medical bills. For your food truck, you need commercial vehicle insurance like
• Collision insurance for repairs to your truck if it is damaged in a traffic accident
• Comprehensive insurance to pay for other damages, like theft or fire
• Medical coverage for your medical bills after an accident
• Uninsured and underinsured motorist coverage in case you’re in an accident and the other driver isn’t insured
Insurance to Protect Your Business
General commercial liability insurance pays if someone sues you because your business caused damage, for example, if a customer trips and falls while waiting in your line, or an employee bumps into a wall when carrying equipment.
Insurance for Your Equipment
Commercial property insurance repairs or replaces your truck’s equipment. If your food truck is in an accident, the commercial auto insurance described above pays for damage to the truck itself and not to any of the equipment, like stove top or freezer, inside the truck.
Other Types of Insurance
• You need workers’ compensation insurance if you have an employee. This insurance pays for the employee’s lost pay and medical bills if he or she injured on the job.
• Cities often have specific insurance requirements, too. For example, Oakland, California, must be named an additional insured. This means that your insurance pays for costs to the city in case your business causes damage.
• Some insurance companies offer insurance coverage packages made just for food truck businesses. These policies include all the types listed above, plus extra coverage for things like crime or food spoilage losses.
When you own a food truck business, you don’t want to risk having too little insurance coverage — you might end up paying a lot of money or losing your business because of an accident. Freeway Insurance understands the specific needs of a food truck business and can give you advice about the insurance you need, so contact us today.