One of the crucial steps you have to take when starting or managing a food cart, deli, hot dog cart, or cookery business is getting food liability insurance.
Liability insurance is a common inclusion in tailored insurance for different businesses in the food industry, whether they be a brewery, wine retailer, winery, pizza delivery, food delivery, juice bar, grocery store, or coffee shop.
This guide will take you into the specifics of food liability insurance. Read to know how it works, how much it costs, and know which carriers provide the best coverage at the most reasonable rates.
Food Liability Insurance
As said earlier, liability coverage in food insurance for farmers’ markets, bakeries, distilleries, vendors, vending machine businesses, and liquor stores comes in different types. Nonetheless, the most common food liability insurance coverages available are:
General Liability Insurance For Food Business
| CoverWallet | NEXT (Best) | Thimble | Hiscox | FLIP | |
|---|---|---|---|---|---|
| Per occurrence limit | $1,000,000 | $1,000,000 | $1,000,000/$2,000,000 | $1,000,000 | $1,000,000 |
| Aggregate limit | $2,000,000 | $2,000,000 | $1,000,000/$2,000,000 | $2,000,000 | $2,000,000 |
| Products and completed operations aggregate limit | $2,000,000 | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 |
| Advertising injury coverage aggregate limit | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 |
| Tenant’s legal liability coverage limit | $1,000,000 | $100,000 | $5,000 | $100,000 | $300,000 |
| Waiver of subrogation included? | Yes | No | Included | Can be included | Excluded |
| Hired/non-owned auto liability coverage included? | Yes | No | Excluded | Can be included | Excluded |
| Equipment breakdown floater included? | No | Yes | Yes | Can be included | Yes |
| Can you get a certificate of insurance online? | Yes | Yes | Yes | Yes | Yes |
| Name additional insureds? | Yes | Yes | Yes | Yes | Yes |
| Deductible | $0 | $0 | $0 | $0 | $0 |
Slip and fall accidents are a common peril when running a food business. As proof, you should know that an estimated $1 million guests experience slip and fall accidents in restaurants every year.
General liability insurance is very important. Use the table above to compare the general liability insurance of companies we recommend.
This food business insurance kicks in when slip and falls, spillage of hot liquids, and other accidents happen while a food business is operating. It covers:
- Third-party bodily injuries-Your food business’s operations might inflict injuries-cuts, lacerations, burns, foodborne illnesses, or even death to other food vendors, customers, visitors, and other third parties. If aggrieved parties decide to file a claim, general liability insurance will cover medical expenses and other associated costs
- Third-party property damage-Not only injuries but your food business’s operations can also cause property damage to third parties. If a claim is filed, this food service liability insurance will recompense the affected parties on your behalf
- Legal expenses-When aggrieved third parties decide to sue after experiencing property damage or bodily injuries due to your food business’s fault, general liability insurance for selling food will shoulder attorney fees, administrative costs, settlements, and other legal expenses
General liability insurance is very comprehensive. Note that this small food business insurance coverage doesn’t only protect you from bodily injury claims or property damage claims. Optional policies are included in the language of general liability coverage. These are:
- Rented premises liability coverage-General liability insurance made part of a tailored food catering insurance plan comes with rented premises liability coverage. Rented premises liability coverage will reimburse the owner if a rented or leased venue is damaged or destroyed due to a food business’s fault
- Advertising injury coverage-Advertising injury coverage will cover lawyer fees, administrative costs, compensatory payments, and other legal expenses if your food business is sued for slander, libel, copyright infringement, and other types of advertising or reputational harm
- Products and completed operations coverage-This optional food handlers insurance coverage will take care of attorney fees, administrative costs, settlements, and other legal expenses when a past customer claims a completed product or service of your food business caused bodily injuries or property damage
Note that general liability insurance will only take care of the above-mentioned claims filed by customers, vendors, and other third parties. This will not cater to claims filed by employees and other similar business entities.
Food Product Liability Insurance
Customers might experience allergies upon consuming the product of your food business. It’s also possible for them to experience foodborne illnesses and sue your business for improper food preparation or food poisoning. This peril falls out of the scope of general liability insurance. You need another food product insurance coverage-particularly product liability insurance.
Food product liability insurance will take care of attorney fees, settlements, administrative costs, and other legal expenses if your food business caused or allegedly committed food poisoning or food mishandling. But note that in other industries, this insurance also covers claims filed because a product has:
- Errors in design
- Errors in labeling
- Manufacturing defects
Product liability insurance is available as a stand-alone policy. But note that this is sold by food processing insurance companies as additional coverage to general liability insurance.
Public Liability Insurance For Food Business
Some food businesses find general liability insurance too much for the risks they face. You might see the coverage the same way too and look for another available protection. In this case, go for public liability insurance.
Just like general liability insurance, public liability insurance for food business covers bodily injury claims and property damage claims filed against your food business. However, its scope is more limited because you can’t add optional advertising injury coverage, rented premises liability coverage, and products and completed operations coverage to it.
Professional Liability Insurance For Food Service Businesses
| CoverWallet | NEXT | Thimble (Best) | Hiscox | FLIP | |
|---|---|---|---|---|---|
| Per occurrence limit | $1,000,000 | $1,000,000 | $1,000,000/$2,000,000 | $1,000,000 | $100,000 |
| Aggregate limit | $2,000,000 | $2,000,000 | $1,000,000/$2,000,000 | $1,000,000 | $200,000 |
| Name additional insureds? | Yes | Yes | Yes | Yes | Yes |
| Waiver of subrogation included? | Yes | No | Yes | Can be included | No |
| Deductible | $500 | $500 | $500 | $50/$10,000 | $500 |
Insurance companies will offer professional liability insurance if your business doesn’t only sell food but also offer food preparation, manufacturing, and other related services for clients. Examples of food businesses that will find this food service insurance very useful are personal chefs, home bakers, and catering businesses.
Use the table above to compare the professional liability insurance of the carriers we recommend for food service businesses.
Professional liability insurance’s job is to cover attorney fees, settlements, administrative costs, referral fees, retainer fees, contingency fees, and other legal expenses when a customer sues for:
- Misrepresentation
- Violation of fair dealing
- Breach of confidentiality
- Violation of good faith
- Negligence
- Other acts constituting errors and omissions
Liquor Liability Insurance For Food Business
Liquor liability insurance is useful if your food business sells alcoholic products. This is a common inclusion in the general liability policy of food and beverage insurance programs.
Liquor liability insurance will cover attorney fees, settlements, administrative costs, and other legal expenses if an intoxicated guest holds you responsible for bodily injuries or property damage. Coverage also applies if your business is sued for serving liquor to minors. Note that not only businesses but professionals such as bartenders can purchase liquor liability insurance.
How Much Money Can You Get From Food Liability Insurance Policies?
General liability insurance for food business provides $1 million-$2 million coverage for bodily injury claims, property damage claims, and legal defense costs. But note that you can find insurance companies underwriting general liability insurance having $500,000, $3 million, or $5 million coverage.
Advertising injury coverage, rented premises liability coverage, and products and completed operations coverage has a $100,000-$1 million limit depending on the insurance company.
Professional liability insurance provides $1 million coverage. But note that you can ask the carrier to increase limits to tailor the coverage to the exposures your food service business is facing.
Product liability insurance can provide $500,000-$1 million minimum coverage. As for liquor liability insurance, this provides a $100,000 minimum coverage.
Get all the best quotes from leading providers in a click of a button!
Other Food Business Insurance Policies Underwritten By Carriers
Food liability policies don’t only comprise tailored food insurance for small business. Other business insurance policies are included such as commercial auto insurance, commercial property insurance, and more.
Commercial Property Insurance
| CoverWallet | NEXT (Best) | Thimble | Hiscox | |
|---|---|---|---|---|
| Building coverage limit (minimum) | $50,000 | $730,000 | $25,000/$500,000 | $25,000 |
| Contents coverage limit (minimum) | $50,000 | $22,000 | $25,000/$500,000 | $25,000 |
| Outdoor signs | Excluded | $2,500 | Excluded | Excluded |
| Accounts receivable | Excluded | Excluded | $5,000/$10,000 | Included |
| Money and securities | Excluded | $2,500 | $1,000 | Included |
| Lock and keys | Excluded | $2,500 | Excluded | Excluded |
| Business interruption floater | Excluded | Included | Included | Included |
| Equipment breakdown floater | Excluded | Included | Excluded | Excluded |
| Inland marine insurance floater | Excluded | Excluded | $10,000 | Excluded |
| Employee dishonesty floater | Excluded | $5,000 | $2,500 | Included |
Insurance companies encourage food businesses owning, renting, or leasing a commercial space to include commercial property insurance in their tailored coverage for selling food. Use the table above to compare the commercial property insurance of the companies we recommend.
Commercial property insurance provides protection against:
- Building damage-When your food business’s commercial space (e.g. warehouse, office, etc.) becomes damaged due to fire, theft, vandalism, and other covered perils, commercial property insurance will cover the repair or replacement of roofing, windows, doors, flooring, siding, etc.
- Building destruction-Fire or extreme weather will destroy your food business’s building and nothing will be left. In this situation, commercial property insurance will cover reconstruction expenses so that you can recover and resume business operations
Commercial property insurance doesn’t provide help if your food business’s commercial space incurred damage or got destroyed due to floods, earthquakes, and mudslides. To get coverage, you need to purchase mudslide insurance, earthquake insurance, and flood insurance as stand-alone policies or endorsements.
Stocks and contents coverage as well as business equipment and tools coverage are additional inclusions in commercial property insurance. Here’s how they work:
- Stocks and contents coverage-Stocks and contents coverage will cover losses if furniture, fixtures, lightings, business documents, and other valuable items become lost or damaged due to fire, theft, vandalism, extreme weather, and other covered perils
- Business equipment and tools coverage-When stoves, mixers, slicers, and other food preparation equipment or tools become lost or damaged due to fire, theft, vandalism, and other covered perils, business equipment, and tools coverage will take care of losses
Note that commercial property insurance and its inclusions don’t automatically provide coverage for all of your business’s tangible assets. Coverage applies only to business properties you name or schedule in the policy’s terms. Also, the cost of premiums is determined by how many business assets are covered.
Business Owner’s Policy
| CoverWallet | Thimble | NEXT (Best) | Hiscox | |
|---|---|---|---|---|
| General liability aggregate limit | $2,000,000 | $2,000,000 | $2,000,000 | $300,000/$2,000,000 |
| Commercial property coverage limit | $50,000 | $500,000 | $720,000 | $25,000 |
| Optional policies can be added? | Yes | Yes | Yes | Yes |
| Name additional insureds for free? | Yes | Yes | Yes | Yes |
| BOP discount? | Yes | Yes | Yes | Yes |
A business owner’s policy is underwritten for small-time food businesses, typically those with a revenue of $1 million or less per year. A business owner’s policy combines general liability and commercial property insurance. Therefore, it grants protection against lawsuits and commercial losses.
Buying a business owner’s policy is much cheaper than buying general liability and commercial property insurance on their own. Moreover, it’s easier to manage as you’re using two insurance policies as a single insurance product. Use the table above to compare the business owner’s policy of companies we recommend.
Equipment And Tools Insurance
| NEXT (Best) | Thimble | Hiscox | FlIP | |
|---|---|---|---|---|
| Aggregate limit | $5,000/$10,000 | $2,500/$5,000 | $5,000/$25,000 | $5,000/$10,000 |
| Covers hired and borrowed equipment? | $5,000/$10,000 | $2,500/$5,000 | No | No |
| Miscellaneous equipment also covered? | $5,000/$10,000 | No | No | No |
| Offered as an endorsement to general liability insurance? | Yes | Yes | Yes | Yes |
| Deductible | $500 | $500 | $0 | $250 |
This policy covers the stoves, slicers, mixers, dicing machines, refrigerators, ovens, griddles, fryers, and other cooking and tools you own and use for commercial purposes. Use the table above to compare the equipment and tools insurance of the carriers we recommend.
Equipment and tools insurance will cover replacement or repair expenses if your kitchen implements get lost or damaged because of:
- Fire
- Theft
- Vandalism
- Operator error
- Electrical shorts
- Impact
- Mechanical or electrical breakdown
Equipment and tools insurance is offered as an add-on to the general liability insurance of food businesses. You might also find this as an optional policy in commercial property insurance.
Business Interruption Insurance
If perils force you to suspend business operations, business interruption insurance covers employee wages, taxes, loans, mortgages, and other operational costs while revenue isn’t generated. Business interruption insurance is usually offered as an automatic add-on to commercial property insurance.
Workers Compensation Insurance
Your food business will employ people. The thing is work-related injuries and diseases are very common. Workers will sustain cuts, burns, lacerations, fractures, and other injuries. If not these, your employees can get sick due to salmonella, campylobacteriosis, listeria, and other foodborne illnesses.
When employees or an employee suffers from a work-related injury or disease, your food business must provide help. This is a mandate of law and you need to provide compensation, no matter how costly. To avoid using business funds or personal funds when doing so, get workers’ compensation insurance that covers the following:
- Medical treatment/procedure-Workers compensation insurance will take care of the expenses for surgeries, therapies, and other medical treatments/procedures your food business’s employee need to fully recover from a work-related injury or disease
- Hospitalization-Workers’ compensation insurance will cover bills if doctors ask your employee to stay in the hospital for days, weeks, or months for intensive care
- Medication-Work-related injuries or diseases won’t heal fast by themselves. Your employee will need medicines to heal faster. Workers’ compensation insurance covers this by providing money for the purchase
- Rehabilitation-Workers’ compensation insurance also functions to cover rehabilitation costs if your employee experiences bodily impairment due to a work-related injury or disease
- Lost income compensation-Your employee will ask you to cover lost income if he or she can’t work due to a work-related injury or disease. Workers’ compensation insurance shoulders the responsibility on your behalf. This insurance provides a weekly allowance as coverage for lost wages. The amount is equal to two-thirds or 67% of your food business’s employee’s average weekly wage.
- Death benefits-When your employee dies due to a work-related injury or disease, workers’ compensation insurance will cover funeral expenses and provide a financial aid to dependents
The coverage of workers’ compensation insurance applies to full-time and part-time employees. Contractors are also covered depending on which state your food business is operating. Individuals, excluded from the coverage, are volunteers and independent contractors.
Not getting workers’ compensation insurance is punishable by law. Punishment can be fines or penalties depending on your food business’s location. That said, here are some examples:
- Food businesses in Arizona not having workers comp face a class 6 felony punishable by one-year imprisonment. Authorities also impose a $1,000 or $10,000 fine.
- Food businesses in Maryland that do not purchase workers’ compensation insurance face a fine not exceeding $10,000
- Nevada authorities issue a stop-work order and a $15,000 fine on food businesses that fail to cover employees with workers’ compensation insurance
- Food businesses not getting workers’ compensation insurance for employees face civil and criminal charges. The civil penalty is a $250 fine multiplied by the days of non-compliance (cannot exceed $50,000). On the other hand, criminal penalty is a $1,000 fine, six-month imprisonment, or both
Employer’s Liability Insurance
Employer’s liability insurance covers attorney fees, administrative costs, and other legal expenses if an employee sues you for negligence after sustaining a work-related injury or disease. While available as a stand-alone policy, you can get employer’s liability insurance as an optional or automatic add-on to workers compensation insurance.
Commercial Auto Insurance
Commercial auto insurance is essential if you’re the owner of a food truck, food trailer, a concession trailer, an ice cream truck, or any other mobile food business:
- Auto liability coverage-Auto liability coverage in commercial auto insurance will cover medical expenses or reimbursements if your food business’s vehicle caused an accident resulting in injuries or property damage to third parties
- Physical damage coverage-Physical damage coverage is available as a collision or comprehensive coverage. Collision physical damage coverage will take care of parts repair or replacement if your food business’s commercial vehicle incurred damage after crashing into another vehicle or object. As for comprehensive physical damage coverage, this covers costs if fire, theft, vandalism, and other covered perils damaged your food business’s vehicle
- Non-owned/hired auto liability coverage-Non-owned/auto liability coverage will cover the accidents caused by a vehicle your food business hired. If employees are using their personal vehicle on your business’s behalf and an accident happens, non-owned/hired auto liability coverage may also provide help.
- Emergency roadside assistance coverage-Emergency roadside assistance coverage will reimburse what you spend on tire rental, battery replacement, battery jump-start, and other related services
Food Manufacturing Insurance
Tailored insurance for food manufacturing businesses has general liability insurance, commercial property insurance, workers’ compensation insurance, product liability insurance, and commercial auto insurance having bobtail, non-trucking liability, and unladen insurance coverages as inclusions. Businesses that can be covered through food manufacturing insurance are candy factories, chocolate factories, large bakeries, etc.
Cottage Food Insurance
Home-based food manufacturers such as small candy makers, chocolate makers, pastry professionals, and others can get coverage through cottage food insurance.
Liability insurance for cottage food business include general liability insurance with product liability coverage, and professional liability insurance.
Aside from cottage food liability insurance policies, there is also commercial property insurance with equipment breakdown coverage, and workers’ compensation insurance.
Restaurant And Bar Insurance
Insurance policies specially underwritten for restaurants and bars offer general liability insurance with liquor liability coverage as a primary inclusion.
Additional policies available in restaurant and bar insurance are commercial property insurance with stocks and contents coverage, workers’ compensation insurance with employer’s liability coverage, and business interruption insurance.
Commercial Kitchen Insurance
Commercial kitchen insurance has general liability insurance with rented premises liability coverage and products and completed operations coverage. Other recommended coverages are commercial property, workers’ compensation, and commercial auto. Equipment breakdown coverage can be added as a stand-alone policy.
Food Distributor Insurance
Food distributor insurance is composed of general liability insurance with stocks and contents coverage and advertising injury coverage, commercial property insurance, workers compensation insurance, and motor carrier policy having non-trucking liability and bobtail insurance.
Home Food Business Insurance
Insurance especially made for home food businesses allows the policyholder to enjoy the protection general liability insurance provides. Equipment breakdown insurance can be added to home food business insurance as additional protection.
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Food Business Insurance Cost
The food business insurance cost depends on your location, revenue, number of employees, business history, claims history, and other factors. But still, the average food liability insurance cost (a general liability insurance to be specific) is $27 per month or $324 per year for a $1 million coverage. Here’s another table that shows how much the best companies charge for their $1 million general liability insurance for food businesses.
| Cost per Month | Cost per Year | Best for | |
|---|---|---|---|
| FLIP | $24.92 | $299.04 | Food business insurance with dedicated custom limits |
| NEXT | $25 | $300 | Best overall; Fastest food liability insurance |
| CoverWallet | $26 | $312 | Food liability insurance quotes comparison online |
| Tivly | $27 | $324 | Comparing food liability insurance quotes over the phone |
| Hiscox | $28 | $336 | Food businesses looking for worldwide liability coverage |
| Thimble | $30 | $360 | Short-term food liability insurance |
The best way to get an estimate of your rates is to compare quotes. Start here by clicking the “Get Quotes” button and filling up the form.
Get all the best quotes from leading providers in a click of a button!
Best Food Liability Insurance Companies
Here are the best food liability insurance companies that provide the best coverage for food businesses. Read to know their pros, cons, and monthly pricing for a $1 million general liability coverage.
NEXT Food Liability Insurance
Pros
- Best overall
- Get an online proof of insurance and send as a text message, email, or social media post
- Great customer service and reputation
- Issues an online proof of insurance instantly
- Fastest food liability insurance
- Outstanding value for money
- Bundle two or more insurance policies and get a 10% discount
Cons
- Couldn’t find any
NEXT’s general liability insurance comes with a foodborne illness coverage. You can choose to bundle this with commercial property insurance, workers’ compensation insurance, and tools and equipment insurance in a business owner’s policy. NEXT allows you to add additional insureds, pay premiums online, and get free certificates of insurance.
Best for: Best overall; Fastest food liability insurance
Average cost: $25 per month
Our rating: 10/10
CoverWallet Food Liability Insurance
Pros
- Get insured online immediately
- Compare quotes from different carriers for an informed purchase
- Stable rates
- Provides numerous types of coverage for more than 10 kinds of food businesses
Cons
- CoverWallet doesn’t underwrite the insurance it sells
CoverWallet is an insurance broker with an online quotes comparison platform you can use to find carriers providing general liability insurance and other coverages for food businesses. Just provide some basic business information and this company’s platform will send you the quotes of carriers. Note that CoverWallet allows you to add clients or landlords as additional insureds, pay premiums online, and get a certificate of insurance for free.
Best for: Food liability insurance quotes comparison online
Average cost: $26 per month
Our rating: 10/10
Tivly Food Liability Insurance
Pros
- Responsive customer service
- Call and compare quotes over the phone
- A partner of many reputable insurance companies
Cons
- You need to call to get a quote
Sometimes, insurance companies will ask you to get in touch with Tivly (formerly CommercialInsurance.NET) to get general liability, professional liability, and other insurance products for food businesses. You need to speak with a representative to get covered. That said, call Tivly now and compare food liability insurance quotes over the phone.
Best for: Comparing food liability insurance quotes over the phone
Average cost: $27 per month
Our rating: 10/10
Hiscox Food Liability Insurance
Pros
- Over 400,000 businesses choose Hiscox
- Worldwide coverage
Cons
- Many complain that Hiscox doesn’t do much when it comes to resolving customer disputes
Hiscox offers general liability coverage for food trucks and other related businesses. You can decide to get a business owner’s policy to enjoy the protection commercial property insurance provides. Note that this company provides worldwide coverage-meaning that your food business is covered no matter which country it is located.
Best for: Food businesses looking for worldwide liability coverage
Average cost: $28 per month
Our rating: 10/10
Food Liability Insurance Program (FLIP)
Pros
- Get insured instantly online
- Unlimited additional insureds
- Covers many types of small food businesses
Cons
- Customer service can be unresponsive sometimes
Food Liability Insurance Program (FLIP) covers food carts, concessions, caterers, farmers’ markets, bakers, private chefs, and more. Coverage starts at $24.92 a month for general liability coverage. This company’s insurance for food businesses already comes with inland marine coverage. Also, you can add as many additional insureds as you want, have 24/7 access to policy documents, and enjoy customized dedicated limits.
Best for: Food businesses looking for coverage with dedicated limits
Average cost: $24.92 per month
Our rating: 10/10
Thimble Food Liability Insurance
Pros
- Short-term liability insurance for food businesses
- Instant coverage online
- Insures customers in 60 seconds
Cons
- Not available in all states
Thimble’s general liability insurance is available for grocery stores, restaurants, food stands, food trucks, and other related businesses. It is available as an annual or short-term policy lasting for only hours, weeks, days, or months. Coverages you can buy together with Thimble’s general liability insurance are workers’ compensation and commercial property insurance.
Best for: Short-term food liability insurance
Average cost: $30 per month
Our rating: 8/10
