Food Vendor Insurance

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

Whether you own a food truck, run a catering company, or sell food at a farmer's market, you may be looking for food vendor insurance to safeguard your funds from the hazards of selling food to people. We'll talk about what food vendor insurance covers, how much it costs, and where you can find the best policy for your needs. Many insurance companies make it quick and simple to obtain coverage, allowing you to start your food business without delay.

Do I Need Food Vendor Insurance?

Yes, if you sell food, you must have food vendor insurance. Food contamination can occur even with adequate handling and preparation. An employee could get hurt on the job or accidently damage the event site. These risks might lead to costly lawsuits that can ruin your company if you do not have adequate 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 most states require commercial auto insurance if you drive or park a food truck or trailer on public roads or deliver food in a vehicle.

The good news is that many companies provide reasonably priced coverage. Bundling numerous plans will typically result in a discount, and choosing a greater deductible can also help keep your costs cheap.

What Is Food Vendor Insurance?

Food vendor insurance is a collection of policies required to run a food business, such as a food truck or concession stand. Different types of food vendors may require different types of coverage, but these are the most common policies that most food vendors will require.

General Liability Insurance

General liability insurance covers legal bills and medical expenses incurred as a result of accusations that your company is to blame for property damage, personal injury, or advertising injury. General liability insurance generally includes product liability insurance, which protects against food poisoning lawsuits. Food vendors are frequently required by event organizers to have general liability insurance.

Commercial Property Insurance

If you own a business or have expensive equipment installed in a rented space, you'll need commercial property insurance. This covers the cost of repairing or replacing your property or equipment following a covered loss, such as a kitchen fire or vandalism. Because earthquakes and flooding are typically not covered by commercial property insurance, some business owners may opt to purchase separate policies to protect against these risks.

Business Owner's Policy

Some food sellers may want to obtain a business owner's policy (BOP), which combines general liability and commercial property insurance into one easy package. These policies frequently contain business interruption insurance, which helps replace net income if your company's operations must be halted due to a covered loss.

Inland Marine Insurance

While a commercial property or business owners policy may cover equipment that remains on your company's premises, it will not cover property that you bring with you to events. Inland marine insurance assists in the repair or replacement of laptops, kitchen appliances, and other items while it is being carried.

Workers’ Compensation Insurance

Workers' compensation insurance pays for an employee's medical expenditures and missed wages if they are injured or ill while performing their job duties. Most states require this type of coverage if you have a certain number of employees.

Liquor Liability Insurance

Liquor liability insurance pays for legal fees and judgments, as well as repairs and medical expenditures, in the event of a lawsuit stemming from your business's service of alcoholic beverages. 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. Food sellers who sell or distribute alcohol must have liquor liability insurance.

Commercial Auto

Commercial auto insurance is required if you operate a food truck, drive between clients for your catering business, or otherwise employ vehicles in your business activities. It provides the same coverages as a personal auto policy, including liability insurance, physical damage coverage, medical payments, and uninsured motorist coverage. You can get hired and non-owned auto insurance if you don't own the automobiles you use for business.

Cyber Insurance

Businesses that keep client data will require cyber liability insurance, which covers different liabilities and aids in the recovery of your company's reputation, lost or corrupt data, or lost business income following a cyber assault. For example, if you keep credit card information for your catering clients and your firm suffers a breach, cyber insurance would protect you from claims resulting from financial loss to customers.

Food Vendor Insurance Cost

The cost of food vendor insurance is determined by the types of coverage selected, the coverage limits, the size, location, and number of employees. FLIP offered the cheapest general liability policy we could find at $299 per year, although company owner's policies, which include property coverage, normally start at $300 to $500 per year and can go considerably higher depending on your demands. A normal business vehicle's commercial auto insurance typically costs $600 to $2,400 per year. According to Next, workers' compensation insurance can cost as little as $146 per year.

Keep in mind that certain insurance providers will allow you to combine your policies to save money. That's why it's frequently best to go with a firm that provides all of the coverages your company needs.

Best Food Vendor Insurance Companies

Best for Cheap Package Coverage: FLIP

Pros

Coverage packages starting at $299/year
Includes tools and equipment coverage
Offers liquor event coverage
Unlimited free additional insureds

Cons

Doesn’t offer commercial auto
Limited property coverage

FLIP offers low-cost general liability coverage that includes tools and equipment coverage and limited property damage coverage for rented premises to food vendors that do not own a physical site. It starts at $299 per year and can be upgraded to include liquor liability or purchased for individual events. Furthermore, event organizers can be added as additional insureds for free. FLIP, on the other hand, does not provide commercial vehicle or ordinary commercial property coverage.

Best for Flexible Coverage: Thimble

Pros

Buy insurance by the hour, day, or month
Buy coverage entirely online in minutes
Occurrence-form coverage

Cons

Doesn’t offer commercial auto
Doesn’t offer liquor liability

Thimble allows you to gain coverage in minutes. You can get short-term coverage or pay for a monthly policy, and you can suspend or adjust your policy at any moment to accommodate seasonal changes. The coverage is occurrence-based, which is more comprehensive, and policyholders like the customer service, which includes live chat help. However, the company does not provide commercial auto insurance or liquor liability insurance.

Best Business Owner's Policy: Nationwide

Pros

Comprehensive BOP includes equipment breakdown coverage
Highly ranked for customer satisfaction
A+ (Superior) financial strength rating

Cons

Must speak with an agent to start your policy

Nationwide is highly rated and provides a comprehensive business owner's policy (BOP) designed specifically for the food service industry. In addition, the corporation provides commercial auto, workers' compensation, spoilage coverage, and other services. However, in order to obtain specific coverage details and purchase a policy, you must speak with an agent.

Best for Discounts: Next

Pros

Save up to 25%, including a 10% bundling discount
Access a live certificate of insurance
Easy to add unlimited additional insureds

Cons

Fewer add-ons, such as spoilage coverage

Next is fantastic for quick, low-cost coverage—for example, workers' compensation insurance can be as low as $146 per year, with a discount for purchasing multiple policies. Next also provides 24/7 access to a live certificate of insurance that can be quickly shared and amended to include additional insureds such as event organizers. However, the insurer provides fewer specialized coverages than some competitors.

Best for Policy Customization: BiBerk

Pros

Many add-ons to a BOP
Offers umbrella insurance for extra protection
Fast online quote and application
A++ (Superior) rated for financial strength

Cons

Must call to add additional insureds

BiBerk provides a variety of coverages, industry endorsements, and risk-specific endorsements, as well as an umbrella policy. BiBerk is a Berkshire Hathaway Group company with an A++ (Superior) rating, and you can get a price and apply online. However, adding additional insureds necessitates a phone call.

Best for Commercial Auto: Progressive Commercial

Pros

Largest provider of commercial auto insurance
A+ (Superior) financial strength rating from AM Best
Offers a variety of discounts
Covers trucks and trailers

Cons

Fewer specialized coverages

Progressive clients pay a typical monthly premium of $160 for commercial auto insurance, and the company offers a variety of coverage options and savings, including a telematics program with an enrollment discount and free fleet management tools. Progressive is an excellent choice for your commercial vehicles if you already have liability coverage from another carrier that does not provide commercial auto insurance. Workers' compensation and general liability are also available, but there are fewer particular coverages for food businesses.