If you’re starting your own food truck business, you are going to need insurance coverage. The whole process can be a little complicated, but don’t worry–we’ve put together a step-by-step guide so you can start your new business.
First of all, you will need to have vehicle insurance the day you buy your food truck. Even if the truck is going to stay parked somewhere for the next few months without usage, you are still going to need coverage in case the truck is damaged or if there is an unexpected accident.
Two Important Aspects
The two most important aspects of your new business that you’re going to need to insure are your vehicle and your business overall. Within those two categories, you’ll need to look into commercial auto liability insurance, general commercial liability insurance, and commercial property insurance.
Commercial auto liability insurance
Commercial auto liability insurance comes in right in the beginning – when you buy the truck. It’s similar to your personal car insurance in several ways. But, because your food truck is probably a lot more expensive than your personal vehicle, you’re going to need to have an insurance policy with much higher limits.
What it includes
Commercial auto insurance typically includes collision insurance, which covers damage to your vehicle, comprehensive insurance, to cover you in a fire or in theft, and medical coverage to pay for medical bills in case of an accident. This will also include uninsured and underinsured motorist coverage to protect you in case you’re in an accident with a driver who does not have any insurance.
What it does not include
Commercial auto insurance policies will cover your truck itself, but it may not cover damage to any kitchen equipment inside the truck. You might need to invest in a separate property policy.
General commercial liability insurance
This type of insurance covers you if you get sued for things like causing physical damage to others, using someone else’s business trademark, or making false claims in your marketing materials. This insurance is so important to have. It will help you cover the cost of a lawsuit. And, if you are found to have done something wrong, the insurance will cover that as well.
What it covers
General commercial liability insurance will cover damage to the various properties and pieces of equipment that are involved in running your business. The kitchen equipment in the truck, the computers you use, and the property you own or lease to run the business are covered through this insurance.
Commercial property insurance and more
This type of insurance doesn’t cover your actual truck, but you will definitely need it in addition to your standard vehicle insurance policy. For example, if your kitchen equipment is damaged, your vehicle insurance won’t cover the cost of the repairs, but this type of insurance will.
An umbrella policy is one that you can purchase in addition to everything else. It will increase the limits of your existing policies in order to cover extreme situations. It’s a good idea to ask your insurance agent if your food truck will need an umbrella policy before actually purchasing your insurance.
Certificate of insurance
If your food truck is going to offer catering services, you’re definitely going to need a Certificate of Insurance (COI) for each venue that you want to work with. Some facilities will not allow you to work on their property until you can provide a COI that shows that they are insured on your policy. This might seem like a lot, but don’t worry. This doesn’t mean you need to purchase an extra policy for each venue that you’re going to be working with. You will just need to pay a small administrative fee to have the COI created. Your agent can take care of this for you.
Your homeowner’s policy
If you plan on doing a lot of work for your food truck business out of your own home, especially if your employees or customers will be meeting you at your home, you should absolutely tell the insurance company that manages your homeowner’s policy. All aspects of your home might not be covered if they are being used for business purposes and the insurance company isn’t aware. Make sure the insurance company knows about your home office space so that everything will be covered.
As you can see, there’s a lot to consider when opening your own business. And, opening a food truck business is a little more complicated than the average endeavor. But, you do not need to be worried! Your insurance agent will take care of the minor details as you make the primary decisions. There’s a lot to decide on, but, if you take some time to think about it and plan ahead, it will all go smoothly.
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