Food Vendor Insurance: Coverage, Providers & Cost

Food vendor insurance refers to the types of coverage food vendors need to protect their businesses against financial loss from liability claims. The most common policies for food vendors are general liability and commercial property. Food vendor insurance costs start around $300 to $1,300 annually and can start as low as at $60 for single-day events. Costs will increase with more coverage and larger operations with more employees and equipment.

Every type of food vendor has different food liability insurance needs. This is why using an online broker like CoverWallet makes finding the right policy for the right price a smart solution for food vendors. Within minutes, you can get a free quote from a carrier that understands your business risks and needs.

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What Does Food Vendor Insurance Cover?

Food vendor insurance refers to the coverage mobile food vendors, single event vendors, and concessionaires need. These businesses work in a variety of locations, and each can have different risks. The weekly farmers’ market presents different risks than the concession stand at a large concert venue, and vendors need to know what risks they face so that they can select policies that cover them.

For example, food vendor liability insurance must cover normal business risks, such as slip-and-fall general liabilities as well as risks unique to food vendors. Unique risks include the potential for foodborne illnesses and spoilage due to equipment breakdown.

Who Needs Food Liability Insurance?

Any business that sells food products to the public in nontraditional locations needs food vendor liability insurance. These locations may include concession stands, public sidewalks, and street fairs. Some of the typical small businesses that buy food vendor liability insurance include:

• Food trucks
• Food trailers
• Food carts
• Caterers
• Concessionaires
• Personal and private chefs

Food vendor insurance usually is required for any event, even a one-day event. Restaurants that occasionally work community events or set up tents at food festivals also need a special endorsement or policy to cover the risks of events and mobile operations properly. Some restaurant insurance policies don’t allow for event coverage unless specifically noted and added as an endorsement because of the increased risk for foodborne illnesses.

Food Vendor Insurance Providers

You will find that many national small business insurance companies specialize in certain types of food vendors so they can offer slightly better pricing and protection. We recommend food vendors compare offers from at least three carriers before selecting a policy. That gives them a chance to see how much coverage they can get for the money they spend on premiums.

CoverWallet

CoverWallet is the right choice for food vendors working a variety of events. They can use CoverWallet, an online business insurance broker, to shop for policies with top-rated national carriers that can cover a restaurant doing a one-day street fair or a food cart that branches out to corporate and family events. Available food vendor insurance policies from CoverWallet include general liability, commercial property, and workers’ compensation.

Progressive Commercial

Food truck owners with expensive food prep equipment permanently affixed to their vehicles should consider Progressive Commercial. The carrier is nationally known as a reliable auto insurance provider, giving them an edge in providing the right types of policies for on-the-road food businesses, including food trucks and ice cream trucks. Business owners can save with the Progressive Advantage Business Program with 10% to 15% discounts to business owners who bundle multiple policies.

FLIP

FLIP is a great choice for a food business that works at multiple events throughout the year. With free COI, FLIP is a cost-effective choice for vendors who have to provide proof of coverage to event organizers. In many cases, FLIP provides coverage on the same day. The Great American Insurance Group underwrites FLIP’s liability policies, which start at $299 for food liability insurance.

Hiscox

Hiscox is a good partner for sole proprietors and microbusinesses in a wide field of food vendors, including food and beverage carts, mobile food services, mobile concessions, and mobile street food vendors. Hiscox specializes in general liability for food vendors, with monthly costs as low as $30/month and up to $2 million in coverage limit online. You can adjust your coverage amounts and deductible easily before obtaining the final quote. You’re also more likely to receive a real quote online rather than needing to call and speak to an agent.

Nationwide

Part-time food vendors who might maintain a booth at one or two events per year can find great coverage with Nationwide. This national carrier lets food vendors tailor coverage to short-term policies for use away from any owned or long-term leased premises. Nationwide also offers a choice for the level and length of coverage as well as a separate policy to cover loss to property, stock, or inventory.

Mobile Food Vendor Insurance Costs

Food vendor insurance costs start from $300 to $1,300 per year for most small businesses. If the vendor only needs general liability insurance, the overall cost is less compared to operations that require more coverage, such as commercial property, or those that want a business owner’s policy (BOP) that bundles property and liability coverages.

For example, if you’re a one-person food cart operation, you probably only need basic coverage to cover your risks like a BOP, for general liability and commercial property protection. Your coverage will cost less than a food truck owner with a large vehicle that needs commercial auto insurance and has additional employees that need to be insured with workers’ comp.

Typical Food Vendor Insurance Costs

If food vendors only need coverage for a single event, such as a food festival, general liability insurance is about $100 for five to 10 days of coverage. Premiums are estimates and vary by provider, state, business size, and selected coverages. Some of the factors for determining your food vendor insurance costs are based on your coverage choices like the limits and deductibles.

Factors insurance companies use to determine food vendor insurance costs include:

• Operations: The nature of your business operations impacts your risks, such as if you operate a stationary food stand versus a mobile food cart or a food truck.
• Location: A food cart vendor on a high-crime street corner will have a different rate than a concessionaire positioned in a building with security, such as a concert hall.
• Value of business property: The more physical business assets you have to insure, the higher the premium.
• Employee payroll: Workers’ compensation premiums are based on payroll costs and the type of work employees perform.
• Coverage amount: While increasing liability limits or the number of covered assets does increase premiums, it isn’t a direct correlation. Double coverage doesn’t mean double cost.
• Deductibles: Increasing deductibles reduce premium costs. Make sure you can afford a deductible in a claim before you finalize your policy.
• Claims history: If you have previous claims, your premiums may be higher because you present a higher risk of making another claim in the future.

Common Types of Food Vendor Insurance

Whether you are a mobile food vendor or own a food truck, you’ll need at least some form of business insurance. The most common food vendor insurance policy is general liability. Some vendors also need commercial property and commercial auto insurance to protect the assets and vehicles used for the business.

Commercial General Liability

Commercial general liability is a primary insurance coverage for food vendors, which is why it is sometimes called food vendor liability insurance. This protection is important when you work with the public because it covers costs, including legal fees if you’re accused of causing harm to someone who isn’t an employee.

For example, general liability insurance typically covers:

• Third-party injuries: If you accidentally drop hot coffee while handing it to a customer, burning their hand.
• Foodborne illness: If your customer reports food poisoning after consuming your undercooked product.
• Third-party property damage: If your dolly rolls into someone’s car in the parking lot of an event.

Commercial Property Insurance

Without your cart, equipment, or food station, you wouldn’t have your business, which is why commercial property insurance is important coverage for many food vendors. With this policy, you can repair or replace any business-owned property damaged by covered perils, such as:

• Theft and vandalism: You need to replace your supplies or food truck or cart after someone steals or vandalizes them.
• Fire or water damage: You need to replace your supplies, inventory, and cart or truck after a fire or pipe bursting.
• Food spoilage: Your cart’s motor dies and can no longer keep your products refrigerated, so all your food spoils, and you’re unable to sell it.

Many small businesses can benefit from purchasing a BOP, which combines the protection of a general liability and commercial property into one affordable package. It also comes with business interruption coverage if your business experiences a covered loss that keeps you from operating.

Commercial Auto Insurance

Commercial auto insurance covers third-party liability claims for bodily injury or property damage if you are held liable in a car accident. It can also include first-party protections like coverage for damage caused to your business-owned vehicles caused by uninsured or underinsured motorists. It’s important to note that personal auto insurance does not cover a vehicle that is used primarily for business.

Commercial auto is an essential coverage for food trucks. When your greatest asset and your greatest risk exposure is associated with a commercial vehicle, you need to protect your investment with auto insurance.

Inland Marine Insurance

Mobile food vendors usually don’t have a fixed, brick-and-mortar location where they work, so they need inland marine insurance to cover their valuable assets, such as equipment, tools, supplies, and inventory while moving from one location to another. This is because commercial property insurance only covers items at the location listed on the policy.

Equipment Breakdown Insurance

Equipment breakdown insurance pays for the repair and replacement of equipment and machinery vital to daily operations if damaged by an internal malfunction. While inland marine covers the generator during transit, equipment breakdown replaces the generator if it overheats on a hot summer day at a music festival, resulting in the inability to make or serve food because there is no power.

Workers’ Compensation Insurance

Workers’ compensation insurance provides benefits to your employees in the event of work-related injuries or illnesses. Most states require this coverage if you have employees. Small food vendor businesses that are owner-operated and have no employees aren’t usually required to have this coverage. Some insurance providers offer workers’ compensation for single events of between one and 10 days.

Tips on Applying for Food Liability Insurance

There are different kinds of food vendors but applying for the right coverage follows a similar process for each small business. Whether you operate your food business with a pop-up tent, food cart, food trailer, or food truck, here are three pointers to know before you obtain coverage.

Ask About Insurance Requirements for Events & Locations

Get the right coverage for any event you work by asking them for their insurance requirements, including coverage type, limits, and duration, which also cover setup and breakdown periods. Some event organizers may also want to be named as additional insured on your food vendor liability insurance policy. Most fairs and festivals are scheduled months in advance and require vendor applications several weeks prior to the event, so you’ll need to have your coverage ready early.

Choose a Food Vendor Insurance Provider That Offers Free COIs

Most vendors also need a certificate of liability insurance to prove they have the right amount of liability insurance for a business license or to sign contracts. You’ll likely need to give every event coordinator a COI that lists the organizers as “additional insureds.” COIs can cost around $25 each, so look for a provider that offers fast and free certifications.

Make Sure Food Liability Insurance Covers Your Real Risks

Buying too little food liability insurance for vendors is never a smart idea. You may hope you never have to use your insurance, but you’ll never regret having broad coverage if you do have to file a claim. Also, don’t assume one policy offers complete coverage. For example, if you have a food truck business, property insurance doesn’t cover the truck. For this, you need commercial auto insurance.

Bottom Line

For small business owners in the food industry, getting the right insurance coverage isn’t just about protecting against liability claims or property damage. For many food vendors, insurance is a necessity to do business. To get licenses, permits, and contracts, food vendors often need to have sufficient liability coverage at the very least.