Food vendor insurance is a policy or a combination of policies that food vendors need to protect their businesses from the financial loss of a claim. The average annual cost for the most common policy, general liability, ranges from $350 to $1,000, with a coverage amount of $1 million per occurrence, $2 million aggregate.
Food vendors are a broad industry that encompasses concession stands, food carts, coffee carts, home bakers, and even food trucks and, helpfully, Food Liability Insurance Program (FLIP) offers specialized coverage for all of those businesses. It makes it easy to get insured—you can get a quote and purchase insurance in minutes.
Who Needs Food Vendor Insurance?
Any business selling food in nontraditional locations, including concession stands, street fairs, public sidewalks, and outdoor venues, should consider this. Typical small businesses that need food vendor liability insurance include:
- Food trucks
- Food trailers
- Food carts
- Caterers
- Concessionaires
- Personal and private chefs
- Restaurants at an event
Additionally, if you sell your food at fairs, shows, or events, you’ll need insurance. This is because most events, even one-day events, require food vendor insurance.
Each venue has its requirements and may want to be listed as an additional insured on the certificate of insurance (COI). If you are participating in an event, find out what type of insurance the venue requires because your regular policy, especially if you are a brick-and-mortar restaurant, may not have any off-premises coverage. In that case, you’ll need some form of special event insurance.
Food Vendor Insurance Costs
The type of coverage you need depends on your business. If you are a food truck owner with employees, then you should consider food truck insurance and workers’ compensation insurance.
Policy | Annual Premium | Coverage Amount |
|---|---|---|
General Liability | $350 to $1,000 | $1 million per occurrence and $2 million aggregate |
Business Owner’s Policy (BOP) | $900 to $3,000 | $1 million per occurrence, $2 million aggregate, and $5,000 in property coverage |
Business Auto | $1,300 to $5,000 | $500,000 combined single limit for bodily injury and property damage |
Inland Marine | $350 to $800 | Dependent on the value of the business property |
Insurance companies use a variety of factors to determine the premium, and the risk exposure your business creates is a big part of its evaluation. Anytime you get a quote, be prepared to answer questions related to the following:
- Claims history: Have you had any previous claims, especially in the last three to five years?
- Operations: What does your business do? Do you grill or fry? Do you regularly use liquified petroleum gas (LPG)?
- Location: What area does your food cart usually serve?
- Employees: How many full- and part-time employees are there? Did you perform background checks on them? Have any ever been accused of any crimes?
- Value: What physical assets do you need to insure, and what is their value?
- Equipment: A food truck with $15,000 worth of installed equipment will pay less than one with installed equipment worth over $30,000.
- Alcohol: Does your company serve alcohol or is it a bring-your-own-bottle (BYOB) establishment? Liquor liability can be a costly insurance to purchase.
Keep in mind that many providers will only offer online quotes for smaller operations with revenue of less than $200,000. If you have a larger business, you will likely receive a higher premium and may need to speak with an agent to get a quote.
When beginning the process of finding insurance, start on the right foot and answer the questions as honestly as you can. Truthful answers can help the provider accurately determine which coverage is best for your business.
For tips on getting affordable yet quality coverage, refer to our guide on the ways to save money on business insurance.
Food Vendor Insurance Policies & Coverage
General liability insurance and commercial property insurance are the two most common policies a food vendor will need. If the business has more than one employee, workers’ compensation is likely required. If you transport your equipment or operate a food truck, then you will need commercial auto insurance. Depending on how the policy is structured, you may need inland marine coverage to provide first-party protection for your cart or equipment.
General Liability
General liability insurance is the most common type of policy a food vendor will need to purchase, and the financial risk a liability poses to a business outweighs the cost of the policy. A general liability policy offers broad protection on claims for which your business is legally liable. Most providers offer a general liability policy that has coverage in four categories: property damage, bodily injury, advertising injury, and reputational harm.
General liability can help you if someone trips on a hose attached to your food cart and then falls and is injured or if your cart becomes unsecured and rolls into another vehicle, causing property damage.
For food vendors, there are two coverages you’ll want to see if it is included in your general liability policy or if you can purchase it as an endorsement. The first is product liability and the other is liquor liability.
Commercial Property
Your food cart, equipment, and trailer cost money. If something happens to one of them, you not only are faced with the cost of repairing or replacing it but also the lost income while the item is not working. This is why you want to consider commercial property insurance—it can provide coverage for your equipment. Policies are usually written on a named peril basis, meaning what happens to it has to be specified in the policy. Some named perils are:
- Fire: If your business suffers fire or smoke damage.
- Theft: If someone steals some of your equipment.
- Wind: If the wind blows your cart over and damages it.
Most insurance companies offer what is called a BOP. This is a combination of liability and property insurance, with some additional coverage like lost business income. Some BOPs for food vendors come with equipment breakdown coverage. If not, then look for this endorsement, which can help repair or replace damaged equipment.
Check out our comparison of BOP vs General Liability Insurance to learn about how they stack up against each other.
Commercial Auto
Food trucks, food trailers, and operations using a vehicle for business purposes regularly are going to need commercial auto insurance. Just like a personal auto, you’ll be required to carry liability insurance that will handle property damage and bodily injury for accidents when it is your fault. Depending on the value of your vehicle, or if you have a loan, you’ll want to look into the first-party coverages collision and comprehensive.
Inland Marine
Inland marine is coverage for equipment that moves around a lot. Many BOPs will include coverage for business personal property (BPP). However, the amount may be limited to either a specific location or listed locations on the policy. So, if your food cart or concession stand is in a different location regularly, then check your property policy to see if there is coverage, and if not, then get quotes for inland marine insurance.
Workers’ Compensation
Nearly every state requires you to carry workers’ compensation insurance if you have at least one employee. This important policy takes care of your employees if they are injured or become ill as a result of work-related activities by paying for medical bills and replacing their lost wages. It can also provide some protection for your business if the injured employee decides to sue.
Not only is workers’ comp required in nearly every state, but workers’ comp claims can also be costly if you don’t have any coverage. According to the National Safety Council, the average cost of a workers’ comp claim for a burn injury is $54,173.
Best Food Vendor Insurance Companies
- FLIP: Best overall provider
- Simply Business: Best for owner-operator vendors
- Next Insurance: Best for food carts
- CoverWallet: Best for concessionaires
- Progressive Commercial: Best for food trucks
FLIP: Overall Best Food Vendor Insurance Provider
FLIP developed an insurance program for caterers, concessionaires, market vendors, food trucks, cottage law vendors, and food cart owners. You can purchase a policy online in 10 minutes or less, with premiums starting at $25.92 monthly.
More than 27,000 businesses in the food industry are insured through FLIP. Because of the wide range of food vendors it insureds, multiple packages to choose from, ease of quoting, and immediate availability of policy documents, it is our best provider for food vendor insurance.
Simply Business: Best for Owner-operator Vendors
Online insurance brokerage Simply Business specializes in finding insurance for owner–operator vendors and microbusinesses, such as those with one to three employees. Helpfully, it works with many top-rated carriers to provide you with multiple options for insurance, making it easy for solopreneurs to compare insurance costs and find the right provider.
For detailed information, read our review of Simply Business where we cover use cases, insurance partners, and the quoting process.
Visit Simply Business for a Quote
Next Insurance: Best for Food Carts
Food cart business owners don’t necessarily need as much coverage as other food vendors because their business is narrower in focus. Through Next Insurance’s quick quoting process, the provider offers affordable coverage options that are customized to fit different needs. If you are working at a special event or selling on the street and need immediate proof of insurance, Next Insurance makes that possible online or through its app.
Our Next Insurance review discusses the provider’s policies and coverages, costs, policyholder services, and more.
Visit Next Insurance for a Quote
CoverWallet: Best for Concessionaires
Food vendors can often be found at special events, such as craft shows, farmers markets, and trade shows—and each show may require a different type or level of coverage for the event. If you are a concessionaire, you likely have several employees working for you. Online broker CoverWallet makes finding concession stand insurance easy by letting you select which coverage you need and by offering multiple carrier options for a business of your size.
You may be interested in reading our review of CoverWallet to learn more about the broker’s insurance options, quoting process, and use cases among others.
Progressive Commercial: Best for Food Trucks
Progressive is the number one insurer for commercial vehicles, per NAIC’s 2022 Market Share Report. It can insure nearly any type and size of food truck and, through its auto policy, provide coverage for installed kitchen equipment. Through its advantage program, it can provide general liability and other coverages for your business, making it the best insurance provider for food trucks.
Visit Progressive Commercial for a Quote
Frequently Asked Questions (FAQs)
Food liability insurance costs can range from $350 to $1,000. Costs will vary depending on the size of your business, your cooking operations, and the type of food vendor.
If you have any employees, workers’ compensation will be required—unless you are in Texas or South Dakota. Beyond that, liability insurance for food vendors or general liability may be required depending on how your business operates because most venues will require proof of general liability to let you sell on their premises.
Whether located in a brick-and-mortar building or operating as a mobile enterprise, food businesses require a license to operate. You will want to check with your local government to find out what is required and how to go about getting a license to operate. If you are starting out, you can review our guide on how to start a food truck business.
You can purchase insurance directly from a provider, such as Next Insurance, via a broker, like Simply Business, or from an agent. There is no right way—it depends on what works best for your business.
One of the best ways to bring down the costs of your business insurance is to manage your risk exposure. If your business serves alcohol, ensuring you implement training like TIPS for your servers in place is important for insurance companies. Revisiting hours of operation and demonstrating an intentional plan for checking food temperature and equipment are all important for building a case that your business takes risk seriously.
Bottom Line
Food vendor insurance is a policy, or combination of policies, that protects your business from losses you may face as a result of liability of first-party property claim. The core policies are general liability and property. You know, as a food vendor, that every day is different and presents unique challenges that require quality insurance tailored to your business. FLIP is the overall best provider for food vendor insurance and has the policy, coverage, and services you need.
User review reference:
1Trustpilot | Simply Business
