What’s the Best Way to Insure a Food Truck?

Combine a truck and a business together and, bam, you’ve got a food truck. Food trucks are the life of the party at any festival, parade, or event. In fact, we’ve all known someone (and have probably done it ourselves) who has attended a particular event simply just to take advantage of the food trucks. They’re that good! There’s a lot of appeal in meals on wheels. Plus, the food truck industry grew 8.4%/year from 2007 to 2012 and is only predicted to continue to grow in popularity.

As a food truck owner, you’re probably reaping all the benefits of the boom in popularity of these special vehicles. But this isn’t to say that your food truck isn’t exempt from needing insurance. If anything, food trucks definitely need insurance, especially as risks can come from a number of sources and they’re a motorized vehicle.

Aside from even the “vehicle” component of a food truck, just think of the risks associated with all the different workers you’ll have, the products you’ll prepare, and the clients you’ll be serving. Just one lawsuit could be a huge risk for your business, and it’s up to you to safeguard your business against exposures. Enter food truck insurance.

What insurance does a food truck need?

Firstly, as you probably know, any vehicle in Ontario (and Canada, really) needs to be insured. In Ontario, any motorized vehicle driven on public roadways needs to be insured with accident benefits coverage, third-party liability coverage, direct compensation property damage, and uninsured motorist coverage. These are just the mandatory coverages, to note. Your food truck may need additional coverage, such as collision, comprehensive, and so on to fully protect it from all potential exposures.

If your food truck business has multiple vehicles, all of those will need to be insured under a commercial vehicle insurance policy. If you have 5 or more food trucks, those vehicles could qualify as a “fleet” and you may be able to get a discount if you insure them all through the same provider or under a single fleet insurance policy. Ask an Excalibur Defender about this.

But that’s just one aspect of your business. You’ll also need to consider other business insurance coverages, like:

Business interruption insurance. If your food truck is damaged or out of commission, you will need replacement funds to makeup for your business’s lost income.

Product liability insurance. Food and/or beverages are considered products, so if someone were to fall ill and/or suffer food poisoning due to your product, they could sue. Product liability could protect you from some hefty lawsuit expenses.

Commercial property insurance. This insurance can protect your business for theft of its equipment, ingredients, and so on.

Commercial liability insurance. In addition to the liability insurance you’ll have with your commercial vehicle insurance, commercial liability will help you if your business faces a lawsuit related to property damage or bodily injury.

You can also purchase insurance to cover food spoilage, roadside assistance if you suffer a flat tire or if your food truck breaks down, host liquor liability if your food truck distributes alcoholic beverages, and so on. The key 3 insurance coverages are commercial property, commercial auto, and commercial general liability, but insuring your food truck business may mean looking beyond the bare minimum.

Is food truck insurance expensive?

Insuring anything comes at a price. That’s all part of risk transference. Your insurance will be paid for in the form of premiums, a specific amount you’ll pay once monthly, or even once per year. However, those premiums may vary based on your business’ risk!

Insurers will calculate your food truck business’ premiums based on how many food trucks your business has, how often they are driven, where they operate (streets, events, festivals), what kind of product(s) you sell and distribute, the number of employees, insurance coverage and business history, etc.

Premiums for food trucks can start around $400/year and may increase based on the different risk factors. But, if you want a more accurate gauge of your costs, get a free quote with Excalibur!

Do I need to insure my food truck business?

Food trucks are centered around food and trucks, and while some business insurance options are not mandatory, commercial auto insurance is. You will need auto insurance for your new vehicle. Still, we recommend purchasing what your business needs and not skimping on costs to save money. This could cost you a lot more later down the line!

Some events and festivals may require their food trucks to be insured before they are allowed to participate. This is to reduce the risk for the host venue. They may require you to carry a certain limit of commercial general liability insurance, as well as any other insurance coverages pertaining to specific food or beverage items that you sell. It’s in your best interest to work with a broker to navigate what specifically your food truck needs, since every food truck sells something different! That’s what’s so fun about them!

With the food truck business small but growing, we see more and more of these vehicles out and about on the street. They were prevalent during COVID-19, but now we’re seeing them populating streets, events, and festivals. Protect your food truck business with the right insurance. An Excalibur Defender would be more than happy to discuss your food truck insurance needs when you need us.