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 and $2 million aggregate.
Key takeaways
- Food vendor insurance is an important way to protect your business. This coverage usually is required to participate in venues and special events.
- The two primary coverages food vendors should consider purchasing for their business are general liability and commercial property insurance.
- The annual premium for general liability can range from $350 to $1,000 while the cost of inland marine is similar, running from $350 to $800.
“Food vendor” is a broad term encompassing concession stands, food carts, coffee carts, home bakers, and even food trucks. Helpfully, Food Liability Insurance Program (FLIP) offers specialized coverage for all of those businesses. The company 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, such as concession stands, street fairs, public sidewalks, and outdoor venues, should consider food vendor insurance. 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
Not only is it a good idea to have insurance for your business but, in many instances, you’ll also be required to do so—especially if you sell your food at fairs, shows, or events. This is because most events, even one-day events, require food vendor insurance. Each venue has its own requirements and may want to be listed as an additional insured on your certificate of insurance (COI).
Food Vendor Insurance Costs
The type of coverage you need depends on your business. For example, 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–$1,000 | $1 million per occurrence and $2 million aggregate |
Business Owner’s Policy (BOP) | $900–$3,000 | $1 million per occurrence, $2 million aggregate, and $5,000 in property coverage |
Business Auto | $1,300–$5,000 | $500,000 combined single limit for bodily injury and property damage |
Inland Marine | $350–$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-time and part-time employees are there? Did you perform background checks on them? Have any employees 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.
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 too. 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.
Coverage | What It Covers |
|---|---|
General Liability | Third-party claims for bodily injury, property damage, and advertising injury |
Commercial Property | Damage to business-owned assets, such as building, equipment, and inventory |
Commercial Auto | Property damage and bodily injury for accidents that are determined to be your fault |
Inland Marine | Tools and equipment that you take with you to different locations |
Workers’ Compensation | Employees’ medical bills and lost wages after a work-related illness or injury |
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 a policy. A general liability policy offers broad protection against 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.
Your food cart, equipment, and trailer cost money. If something happens to one of them, you are not only faced with the cost of repairing or replacing it but also the lost income while the item is not working. This is why you should consider commercial property insurance—it can provide coverage for your equipment.
Policies are usually written on a named-peril basis, meaning what happens to something has to be specified in the policy to be covered. Examples of named perils include:
- 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 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.
Food trucks, food trailers, and operations regularly using a vehicle for business purposes will need commercial auto insurance. Just like with a personal vehicle, you’ll be required to carry liability insurance that will handle property damage and bodily injury for accidents that are determined to be your fault. Depending on the value of your vehicle, or if you have a loan, you’ll want to look into the collision and comprehensive first-party coverages.
Inland marine insurance 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 coverage exists and, if not, then get quotes for inland marine insurance.
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 $52, 222.
Best Food Vendor Insurance Companies
- FLIP: Best overall food vendor insurance provider
- Simply Business: Best for comparing quotes for food liability insurance
- Next Insurance: Best for food carts
- Progressive Commercial: Best for food trucks
FLIP: Best Overall Food Vendor Insurance Provider
Pros
- Has an easy-to-use system to get insurance or add coverage
- Is available in all 50 states
- Recently added workers’ compensation insurance
Cons
- Lacks a 24/7 claims line—must report claims through the online dashboard
- Has somewhat limited types of available coverage
- Does not handle claims in-house
Standout Features
- Insurance program for caterers, concessionaires, market vendors, food trucks, cottage law vendors, food cart owners, and more
- Endorsements available for your trailer, cyber insurance, and professional liability
- Very affordable, with starting costs at $299 annually or $25.92 monthly
- Predesigned policy packages, like special event coverage with liquor liability or a standard food vendor policy with liquor liability
Financial stability: The policy is through the Great American Insurance Group (GAIG). AM Best’s rating of GAIG is A+ (Superior).
Simply Business: Best for Comparing Quotes for Food Liability Insurance
Pros
- Offers online accounts and same-day COI
- Is licensed in all 50 states
- Lets you adjust quotes and get real-time updates
Cons
- Has no process for filing a claim directly with Simply Business
- Offers limited coverage options
- Lacks a 24/7 call center for claims or customer service
Standout Features
- Allows you to compare quotes and purchase a policy online
- Ability to tailor coverage to fit your industry with real-time quotes
- Online insurance brokerage specializing in finding insurance for owner–operator vendors and microbusinesses, such as those with one to three employees
- Works with multiple top-rated carriers, which makes it possible to find a policy for as low as $19.58 a month
Financial stability: Simply Business is owned by Travelers, and AM Best rated Travelers A++ (Superior). The quoted policy was through Hiscox, and Hiscox’s AM Best rating is A (Excellent).
Next Insurance: Best for Food Carts
Pros
- Lets you get immediate proof of insurance
- Has an in-house claims team
- Has multiple discounts available
Cons
- May require you to call to finish quote
- Is still adding coverages to its program
- Does not operate a 24/7 call center for claims or customer service
Standout Features
- Dedicated small business insurer with general liability, professional liability, inland marine, commercial property, and workers’ comp available for food carts
- App on iOS and Android functions like a 24/7 call center, letting you manage your policy, file, and track any claims
- Through the app or online you can generate and share a COI instantly—great for food vendor events
- Save up to 10% when you bundle two or more policies with Next
Financial stability: Founded in 2015, Next Insurance is the youngest insurance carrier on this list. However, it has a strong financial rating, as AM Best rated Next Insurance A- (Excellent).
Progressive Commercial: Best for Food Trucks
Pros
- Offers online quotes for commercial auto
- Has multiple discounts available for policyholders
- Offers commercial auto in all 50 states
Cons
- Has different claims lines for different types of coverage
- Offers little information on online account options
- Has a very limited selection of business insurance coverages
Standout Features
- Snapshot ProView® plugs into your vehicle and monitors your driving, potentially resulting in a discount on your overall premium.
- Specialty coverage available for food trucks, including for installed kitchen equipment
- Low complaints for business insurance as monitored by the National Association of Insurance Commissioners (NAIC)
- Network of shops across the country to help you quickly get your business up and running again
Financial stability: Progressive, a legacy carrier, has been around since 1937. AM Best rated Progressive A+ (Superior).
Frequently Asked Questions (FAQs)
General liability insurance costs for food vendors can range from $350 to $1,000 annually. Costs 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 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, like 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 business insurance is to manage your risk exposure. If your business serves alcohol, ensure you implement Training for Intervention Procedures (TIPS) and other relevant training for your servers, which 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 a first-party property claim. The core policies are general liability and property.
As a food vendor, you know 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.
