Food Vendor Insurance: What It Is, Costs, and Companies

Food truck owner giving food container to laughing customer

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Whether you operate a food truck, run a catering business, or sell food products at a farmer’s market, you might be seeking food vendor insurance to protect your finances against the potential risks of selling food to customers. We’ll go over what food vendor insurance covers, what it costs, and where to get the best policy for your needs. Many insurance companies make it quick and easy to get coverage, so you can safely launch your food business without delay. 

Do I Need Food Vendor Insurance?

Yes, if you’re a food vendor, you need food vendor insurance. Even with proper handling and preparation, food contamination can occur. An employee could get injured while working or accidentally cause damage to the event site. These risks can result in costly lawsuits that can bankrupt your business if you don’t have the right insurance coverage. 

Certain coverages are even required by law—for example, most states require workers’ compensation insurance for food vendors with a certain number of employees, and if you drive or park a food truck or trailer on public roads or deliver food in a vehicle, you’ll be legally required to have commercial auto insurance in most states. 

The good news is, many companies offer affordable coverage. You can often get a discount for bundling multiple policies, and choosing a higher deductible can help keep your premiums low as well. 

What Is Food Vendor Insurance? 

Food vendor insurance is a group of insurance policies needed to operate a food business, such as a food truck or concession stand. Different types of food vendors may have different coverage needs, but these are the most common policies most food vendors will need. 

General Liability Insurance

General liability insurance covers legal fees and medical payments related to claims that your business is responsible for causing property damage or personal or advertising injury. General liability insurance also typically includes product liability insurance, which protects against lawsuits related to food poisoning. General liability insurance is often required by event organizers for food vendors.

Commercial Property Insurance

If you own a business premises or have installed expensive equipment in a rented space, you’ll need commercial property insurance. This pays to repair or replace your property or equipment after a covered loss, such as a kitchen fire or vandalism. Earthquakes and flooding are typically not covered by commercial property insurance, so some business owners may choose to purchase separate policies for these risks. 

Business Owner's Policy

Some food vendors may prefer to purchase their general liability and commercial property in one convenient package, known as a business owner's policy (BOP). These policies often also include business interruption insurance, which helps replace net income if your business must cease operations due to a covered loss. 

Inland Marine Insurance

While a commercial property or business owners policy may cover equipment that stays in your business premises, it won’t cover the property you bring with you to events. Inland marine insurance helps pay to repair or replace computers, cooking equipment, and other property while it is being transported. 

Workers’ Compensation Insurance

Workers’ compensation insurance covers an employee’s medical bills and lost wages after they become injured or ill in the course of their job duties. This type of coverage is required in most states if you have a certain number of employees. 

Liquor Liability Insurance

Liquor liability insurance covers legal costs and judgments, repairs, and medical bills after a lawsuit arising from your business serving alcohol. For example, if you serve an intoxicated person alcohol and they assault another person, damage property, or get in a drunk driving accident, the harmed party could sue your business. Liquor liability insurance is essential protection for food vendors that sell or distribute alcohol. 

Commercial Auto

If you operate a food truck, drive between clients for your catering business, or otherwise use vehicles in your business operations, you’ll need commercial auto insurance. It includes the same coverages that typically come with a personal auto policy, such as liability insurance, physical damage coverage, medical payments, and uninsured motorist coverage. If you don’t own the vehicles you use for business, you can purchase hired and non-owned auto insurance instead. 

Cyber Insurance

Businesses that store customer data will need cyber liability insurance, which covers multiple liabilities and helps pay to recover your business’s reputation, lost or corrupt data, or lost business income after a cyber attack. For example, if you store credit card data for your catering clients and your business suffers a breach, cyber insurance would protect you from lawsuits brought due to customers’ financial loss. 

Food Vendor Insurance Cost

The cost of food vendor insurance depends on the types of coverage you choose, your coverage limits, your business size, location, and number of employees. The cheapest general liability policy we could find was $299 per year from FLIP, while business owner's policies, which include property coverage, typically start at $300 to $500 per year, and can run much higher depending on your needs. Commercial auto insurance for a standard business vehicle typically costs $600 to $2,400 per year. And workers’ compensation insurance can cost as little as $146 annually, according to Next. 

Keep in mind, some companies will allow you to bundle your insurance policies to save money. That’s why it often makes the most sense to choose a company that offers all the coverages your business needs. 

Best Food Vendor Insurance Companies

Best for Cheap Package Coverage: FLIP

  • Coverage packages starting at $299/year

  • Includes tools and equipment coverage

  • Offers liquor event coverage

  • Unlimited free additional insureds

  • Doesn’t offer commercial auto

  • Limited property coverage

For food vendors that don’t own a physical premise, FLIP provides cheap general liability coverage that includes tools and equipment coverage and limited property damage coverage for rented premises. It starts at just $299 per year, and you can add liquor liability or purchase it for individual events. Plus, you can add event organizers as additional insureds for free. However, FLIP doesn’t offer commercial auto or standard commercial property coverage.

Best for Flexible Coverage: Thimble

  • Buy insurance by the hour, day, or month

  • Buy coverage entirely online in minutes

  • Occurrence-form coverage

  • Doesn’t offer commercial auto

  • Doesn’t offer liquor liability 

Thimble makes it easy to get coverage in minutes. You can purchase short-term coverage or pay for a monthly policy, and you can pause or modify your policy at any time to cope with seasonal fluctuations. Coverage is occurrence-form, which is more robust, and policyholders have great things to say about the customer service, which includes live chat support. However, you can’t get commercial auto insurance or liquor liability insurance from the company. 

Best Business Owner's Policy: Nationwide

  • Comprehensive BOP includes equipment breakdown coverage

  • Highly ranked for customer satisfaction

  • A+ (Superior) financial strength rating

  • Must speak with an agent to start your policy

Nationwide is well-rated and offers a comprehensive business owner's policy (BOP) tailored to the food service industry. The company also offers commercial auto, workers’ compensation, spoilage coverage, and more. However, you’ll need to speak to an agent to get certain coverage details and buy a policy. 

Best for Discounts: Next

  • Save up to 25%, including a 10% bundling discount

  • Access a live certificate of insurance

  • Easy to add unlimited additional insureds

  • Fewer add-ons, such as spoilage coverage

Next is great for quick, affordable coverage—for example, workers’ compensation insurance can cost as little as $146 per year, and you’ll get a discount for buying multiple policies. Next also offers 24/7 access to a live certificate of insurance that can be modified to include additional insureds, like event organizers, and easily shared. However, the insurer offers fewer specialized coverages than some other companies. 

Best for Policy Customization: BiBerk

  • Many add-ons to a BOP

  • Offers umbrella insurance for extra protection

  • Fast online quote and application

  • A++ (Superior) rated for financial strength

  • Must call to add additional insureds

BiBerk offers a wide range of coverages, industry endorsements, and risk-specific endorsements, and you can also get an umbrella policy. BiBerk is part of Berkshire Hathaway Group, an A++ (Superior) rated insurer, and you can get a quote and apply online. But adding additional insureds requires a phone call. 

Best for Commercial Auto: Progressive Commercial

  • Largest provider of commercial auto insurance

  • A+ (Superior) financial strength rating from AM Best

  • Offers a variety of discounts 

  • Covers trucks and trailers

  • Fewer specialized coverages

Progressive policyholders pay a median premium of $160 monthly for commercial auto, and the company offers a variety of coverage options and discounts, including a telematics program that provides an enrollment discount and free fleet management tools. If you’re getting your liability coverage from another company that doesn’t offer commercial auto insurance, Progressive is a great choice for your business vehicles. The company also offers workers’ compensation and general liability, but fewer specialized coverages for food vendors. 

How Much Does Food Vendor Insurance Cost?

The cost of food vendor insurance will depend on factors such as your level of risk, the types of coverage you choose and the limits, your location, and the size of your crew. A package with general liability coverage and some property coverage starts at just $299 from FLIP, but some food vendors may need higher limits or more coverage, such as commercial auto. 

What Is Food Vendor Insurance?

Food vendor insurance is a group of insurance coverages that are essential to most food vendor businesses operations. Almost all food vendors need general liability insurance and, if they have employees, workers’ compensation insurance. Some businesses may also need commercial property insurance, inland marine, liquor liability, and commercial auto. 

How Much Is Insurance for a Food Truck?

Food truck insurance starts at around $299 per year for a streamlined package of basic coverages, such as general liability and products-completed operations coverage (if your food hurts someone). But food trucks that drive or park on public roads will need commercial auto insurance as well. Rates can vary significantly depending on the type of truck, the cost of its equipment, and where it’s parked. Some food trucks may also need additional coverages, like workers’ compensation and liquor liability insurance. 

Article Sources
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