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Whether your food business involves baking sweet treats from your home bakery or serving Nonna’s famous pasta at a banquet hall, you need food business insurance.
In many states, insurance is a legal requirement for businesses handling or serving food and beverages. Additionally, insurance is imperative to protect your businesses from financial, legal, and reputational risks.
For example, say you receive a lawsuit after a customer claims you gave them food poisoning. Without food business insurance in place—if found guilty—you are responsible for paying all the legal fees, compensation, medical bills, and other costs.
Food business insurance also protects against customer and employee injury, property damage, business slander and defamation, and more.
Who Needs Food Business Insurance?
All businesses that make, sell, or distribute food should have some type of business insurance. This includes, but isn’t limited to:
- Banquet halls
- Bars
- Cafes and Coffee Shops
- Cafeterias
- Catering Businesses
- Delis
- Fast Food Places
- Food Trucks
- Food Vendors
- Ice Cream Shops
- Personal Chefs
- Pizza Shops
- Restaurants
“Vendors are always so worn out after our local renaissance fair—it draws in over 100,000 people over two days. I was so excited to be done last year that I somehow missed that the guy next to me moved his food truck. Long story short, I backed up and caused damage to his front end as I was leaving. I’m extremely thankful that my insurance policy covered the damage.” – Tyler M.
Types of Insurance Coverage for Food Business
Every food business is unique, so it is no surprise that food business insurance isn’t one size fits all. While some types of policies are very popular among our food business clients (General Liability Insurance, Business Owners Policy, etc.), the type of insurance(s) you need will depend on your type of food business.
General Liability Insurance
The most popular insurance policy for small food businesses. This blanket policy covers a combination of risks, including property damage, bodily injury, theft, and lawsuits.
Commercial Auto Insurance
For those with commercial vehicles—popular among many food businesses, including caterers, food trucks, and delivery services. Covers bodily harm and vehicle damage due to a car accident or other motor vehicle event.
Commercial Property Insurance
Covers your business property and its contents (equipment, inventory, furniture) in the case of theft, vandalism, fire, or weather-related damage.
Workers’ Compensation Insurance
Most states require companies with employees to take out this insurance policy. It covers medical care, medical bills, lost wages, and disability for employees injured on the job.
Business Owners Policy (BOP)
For those that need a combo of General Liability Insurance and Commercial Property Insurance. Business Interruption Insurance can also be included in this policy—it reimburses losses if your business temporarily closes due to theft, fire, or acts of nature.
Restaurants are deploying technology (like apps, kiosks, and chatbots) to boost their business. 59% are doing it to improve digital customer engagement, 56% to support revenue-generating opportunities, and 44% to improve business analytics.
Cyber Insurance:
Technology in the restaurant business is more important than ever. But you need to be covered when it goes awry. This policy covers data breaches, system hacks, and more.
Product Liability Insurance
If you get sued due to one of your products causing bodily injury or property damage, this insurance will cover you. This includes products you sell, manufacture, or distribute.
Professional Liability Insurance
This covers you if a customer sues you for alleged acts or omissions while serving them. Also referred to as Errors and Omissions Insurance (E&O insurance).
Employment Practices Liability Insurance
Protects you against costs arising from employee misconduct. Example: one of your servers assaults a customer, and the customer files a lawsuit.
Liquor Liability Insurance
Protects your business from accidents arising from intoxicated customers. In some states, this policy is a requirement for getting a liquor license.
Know what you want covered but aren’t sure which insurance will get the job done? No problem! Our insurance experts are always happy to help. Contact us online or call us at 888-592-6631.
How to Obtain Food Business Insurance
1. Get an Insurance Quote for Your Food Business
Fill out our online insurance application. This form is the quickest and easiest way to get insurance. It sends a free insurance quote directly to your inbox.
Information that you will need on hand includes:
- Business Information: Name, start year, description of operations.
- Federal EIN
- Contact Information
2. Purchase Your Insurance Policy
Instructions on how to purchase your insurance online will arrive with your insurance quote. If you have any questions or want to customize your insurance policy further, please get in touch with one of our insurance agents at 888-592-6631.
How Much Does Food Business Insurance Cost?
On average, food businesses in the US pay $249 monthly for insurance. However, please keep in mind that all companies are different. For example, a street vendor’s insurance will be far less than a large banquet hall.
The cost of your insurance policy will depend on factors like:
- Amount of coverage required
- Business experience
- Business size
- Number of employees
- Past insurance claims
- Revenue
|
Cost of Most Popular Food Business Insurance Policies |
||
|
Type of Policy |
Average Monthly Cost |
Average Yearly Cost |
|
$57 |
$684 |
|
|
$147 |
$1,742 |
|
|
$67 |
$804 |
|
|
$42 |
$504 |
|
|
$45 |
$542 |
|
The Benefits of Food Business Insurance
Even if you have money set aside for the unexpected, incidents such as vandalism, theft, injury, and lawsuits can financially ruin your food business. Insurance helps protect your financial well-being (and sanity), ultimately protecting your food business when the unexpected strikes.
Food business insurance comes with many benefits, including protection in the event of:
- Broken Equipment – Commercial equipment is crucial to daily operations. If your fridge breaks down or your oven won’t heat, insurance will pay to replace or repair.
- Car Accidents – Commercial car insurance would cover the damages if your delivery person got into a fender bender.
- Lawsuits – If a customer tries to sue you for slipping on a freshly mopped floor, food poisoning, allergic reaction, or other bodily injury, professional liability insurance can help cover legal expenses.
- Lost Income – Fires, floods, and other disasters can cause your restaurant to close unexpectedly. And if your business isn’t operating, you are losing revenue. Luckily, there are food business insurance policies that will help cover those losses.
- Property Damage – From floods to high winds, some policies will cover damage from weather events. Additionally, commercial property insurance protects your property from vandalism and theft.
- Slips, Falls, and Accidents – If a server trips and falls or a chef burns themselves, insurance can pay the medical expenses.
Frequently Asked Questions about Food Vendor Insurance
How do I file an insurance claim?
Submit your claim directly to your insurance company as soon as possible. While most companies accept claims over the phone, some streamline the process using an app or online form.
Once your claim is submitted, an insurance adjuster is assigned to your case. They will request evidence. This may include photos, videos, and/or witness statements. Your adjuster will review everything to evaluate the damage and determine what is covered.
What are the most common insurance claims for food businesses?
Most claims we receive from our food business clients are related to food poisoning and property damage due to theft, vandalism, or poor weather conditions. Additionally, we receive quite a bit related to bodily injury. This is no surprise as according to the National Safety Council, a worker is injured on the job every 7 seconds
Is product liability insurance necessary for all food businesses?
Product liability insurance isn’t necessary for all food businesses, but it is highly recommended. Any company that sells, manufactures, or distributes food products should have this insurance. It protects you in the event that one of your products causes bodily harm or property damage.
Common problems with food items include packaging defects, label errors, and foodborne illness.
How can I reduce my food business insurance premiums?
To reduce your food business insurance premiums, you can get a policy with a higher deductible, bundle business policies, or pay your insurance premium annually.
Want to know if there are other ways you can save money on your insurance? Contact us today.
Sources
2024 Restaurant Technology Study: Accelerating Intelligence. (n.d.). In Hospitality Technology. Retrieved February 4, 2025, from
https://hospitalitytech.com/2024-restaurant-technology-study
Commercial & Business Insurance Guide. (n.d.). In JW Surety Bonds. Retrieved February 4, 2025, from
https://www.jwsuretybonds.com/business-insurance
Workplace Injuries by the Numbers - National Safety Council. (n.d.). In www.nsc.org. Retrieved February 4, 2025, from
https://www.nsc.org/workplace/resources/infographics/workplace-injuries-by-the-numbers