When deciding to venture into business ownership, there’s a lot of financial decisions that must be made, including how much insurance you should purchase. It’s possible to save money on food truck insurance without sacrificing the protection provided by the policy. Below, there are five ways to save money on insuring your food truck so it doesn’t break the bank.
What is Food Truck Insurance?
Food truck insurance comes in two forms: general liability and commercial auto. For the most part, food truck owners will need to have both policies in order to have the most protection possible for their business.
General liability insurance costs an average of $45 per month, or $560 annually for coverage up to $1 million per occurrence. General liability insurance protects food truck owners from damage to a customer’s property, if a customer suffers an injury, or from injuries caused by advertising. There is usually no deductible for a general liability insurance policy for a food truck.
Commercial auto insurance is another policy food truck owners should have. The median cost for commercial auto insurance for a food truck is $135 per month, or $1,620 annually. Damages caused by vandalism and some weather events can be covered by a commercial auto policy. If the driver of the food truck was a third party, this policy might pay for those damages. A commercial auto policy can also cover the cost of a food truck being stolen.
5 Ways to Save Money on Insuring Your Food Truck
With an understanding of food truck insurance, it’s time to explore the five ways you can save money when insuring your food truck so you can invest more in the operation of the business without sacrificing the protection provided by the policy.
Number 1: Hire the Best Staff Possible
The best way to save money when insuring your food truck is to hire the best staff possible. Even though everyone gets their start in the food service industry somewhere, it might not be in your best interest to hire someone without any food service experience when operating a food truck. A food truck is a smaller version of a restaurant but on wheels, but it is a different monster because of such tight quarters. You can hire the best staff possible by taking the following into account:
- Conduct thorough background checks
- Request driving records of all applicants
- Provide thorough training for all employees no matter their experience levels
- Ensure that all of your employees, including yourself, are ServSafe certified
Number 2: Keep the Food Truck Well-Maintained
The better maintained your food truck is, the less likely the chances of experiencing an issue that can lead to a serious accident or incident. Perform routine checks of all the equipment inside the food truck, including the stove, oven, microwave, fridge, freezer, gas connection, propane tank, and other items.
Aside from the food equipment, make sure the food truck is in good working order as a vehicle. This includes the tires, brakes, shocks, transmission, engine, belts, fluids, and other important parts that ensure a motor vehicle runs smoothly.
When it comes to cleaning the food truck, put together a daily, weekly, and monthly schedule for different parts. Make sure that the gas line is clear of debris, the fluids are topped off, the filters have been cleaned or replaced, and that the oil has been changed when recommended by the vehicle manufacturer.
Number 3: Follow Cleaning and Safety Procedures
As the owner of the food truck, it is your responsibility to implement and follow cleaning and safety procedures. These procedures should cover daily and weekly cleaning requirements in order to prevent bug or pest infestations and ensure that customers do not suffer food poisoning. The procedures should be clearly communicated to your employees and posted in the food truck in a visible area so they are reminded of them at all times.
Number 4: Request a High Deductible
This might not seem prudent when applying for a food truck insurance policy, but it can save you money in the long run when it comes to paying your annual insurance premiums. It’s important to note that if you are involved in an accident, you could wind up paying a lot of money out of your own pocket because of the higher deductible. However, if you have a clear driving record and operate your truck in a safe manner, you should have little worry.
Number 5: Request Coverage in a Bundle
Picking and choosing various food truck insurance policies from multiple companies will cost you more. Instead, request coverage in a bundle from one insurance company. This includes general liability, commercial auto, contents, and workers’ compensation. When you bundle the policies with one company you can save money on your annual premiums for each of the four policies, saving you money each year.
A bonus method for saving money on insuring your food truck is to pay the premiums annually. Many business owners opt to pay the premiums monthly when first starting out in order to keep more money in their pockets at the time. If you pay annually, you will save a couple of hundred dollars on the policies, especially if they are bundled together.
How to Compare Food Truck Insurance Policies
When the time comes to purchase food truck insurance, make sure that you follow the steps outlined below.
Do Your Research
Every state has different food truck insurance requirements. Be sure to find out the types of insurance policies required in your state before purchasing coverage. Research should also include speaking with other food truck owners in your region to see what coverage they have for their food trucks. Browse websites of insurance companies that serve your state to find out the policies available and the costs of coverage.
Conduct an Assessment of Your Business
Conduct a thorough assessment of your business. This includes compiling a list of business assets, employee driving records, payroll, and the truck registration. All of this information will help you obtain the most accurate insurance quotes when browsing the options.
Request Quotes from Multiple Insurance Providers
The biggest mistake made by food truck owners when browsing for insurance is only obtaining one or two quotes because they want to become operational as quickly as possible. You should request quotes from at least three different insurance providers and no more than five. Setting the limit to five will ensure that the decision is not overwhelming.
Review the Quotes and Pick the Best Option
Once you have received quotes from at least three insurance providers you can compare all of the coverage options and prices. Pick the quote that offers the best coverage for your food truck business but is also within your budget.
Reassess Your Needs at Renewal
Insurance policies renew either semi-annually or annually. Reassess the needs of your insurance when the renewal period opens. If you need less insurance because of fewer employees or less miles driven, you can reduce the coverage. If you hired additional employees, added a second truck, or drove more than the previous year, it might be time to explore additional coverage.
How to Buy Food Truck Insurance
After you have chosen the insurance provider and policy for your food truck, it’s time to contact the broker or agent who sent you the quote. Tell them you’d like to use their policies to protect your food truck business. The next step will be to sign the paperwork and activate the insurance policies. If you have any questions or reservations, ask them prior to signing the paperwork.
Protect Your Food Truck Business with Food Truck Insurance
Starting a food truck business takes a lot of heart, dedication, and food know-how. There’s more that goes into it than just creating a menu and pleasing the taste buds of your customers. A strong food truck insurance policy that includes commercial auto insurance can protect you if an accident occurs or a customer becomes sick because of the food you serve.
Frequently Asked Questions
1. What are the most common food truck insurance claims?
The two most common food truck insurance claims are theft and fire. Food trucks are often stolen or broken into because the equipment inside them is so valuable. Fires are the other common insurance claim because of the stoves, ovens, gas lines, and propane tanks on board in order to cook.
2. Does general liability insurance cover injuries to food truck employees?
No, general liability insurance does not cover injuries to your food truck employees. This is why it is important to seek a quote for workers’ compensation coverage when browsing food truck insurance policies in your state. Workers’ compensation insurance might be required in your state. If so, you will need to show proof of this coverage in order to obtain a permit to operate by the local entity. Workers’ compensation insurance helps pay employees who are injured while performing the scope of their employment on your food truck.
