What insurance is required for a food truck in Alabama?

Food truck insurance in Alabama usually consists of a business owner's policy that includes general liability and property insurance. Consider an umbrella policy to save money.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Sep 15, 2020

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Here's what you need to know...

  • Plan ahead so your food truck meets business and insurance requirements
  • Keep local and state laws in mind at all times while planning your business
  • Protect your food truck, your business and your employees with different insurance policies

Since they are becoming increasingly popular, you may be interested in getting into the food truck business. Even with the best menu and the most delicious food, there are still some other things you will need to consider.

You’re going to need insurance for any vehicle you plan on driving. Find the best rates for the coverage you need by comparing quotes today. Enter your zip code into our free rate comparison tool above to get started.

Having a solid business plan can mean the difference between a great food truck and one that does poorly.

Your Business Plan

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Your business plan should include the following aspects:

  • Goals for your business
  • Actionable paths to reach those goals
  • Ideas for success
  • Answers to problems you will come across
  • Legal aspects of the business
  • Required equipment
  • Estimated budget
  • Additional costs for running the business

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Your Equipment

Most food trucks are equipped with a commercial stove, refrigerator, oven, fryer, and microwave. You’ll need, at least, two sinks. You need one for hand washing and one for food preparation.

When creating your business plan, consider the type of food you are going to serve from the truck.

Always consider the equipment you will need before you get your truck so you can be sure you have enough space.

The Alabama Department of Health requires that all food trucks and carts comply with their guidelines. You need to start thinking about the compliance of your food truck long before you plan to open for business.

Alabama state requires counties to oversee the compliance of food service areas, but the general rules include:

  • Food service certification
  • Something to keep food adequately cold
  • Separate sinks for hand washing

Auto Insurance Protects You

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The auto insurance plan you choose will protect you in the event something would happen to your traveling business. You can protect your investment with it, but it is also important because it is legally required in Alabama to run your food truck.

It is imperative to shop around for auto insurance on your food truck. If you don’t, you may end up paying more than necessary or you may end up with a plan that doesn’t adequately protect your investment.

Alabama has different requirements depending on the counties. While the majority of the counties in Alabama have food truck rules that are the same, it is important to note the specific county where you are located with have guidelines you will need to follow.

Before getting insurance for your food truck in Alabama, always check with your area’s public health department to find out what you will need in your county.

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Insurance Coverage for Your Food Truck

Commercial auto insurance is necessary in case there is an accident or you damage someone’s property while in the food truck.

Your personal policy will not cover your food truck. Shop around to find a policy that you can customize, but always ensure your policy covers:

Commercial auto insurance generally allows for higher limits and costs on each of these parts.

When you are the only one working for your food truck, you won’t have to worry about your employees driving it or using their own vehicles. Most people, though, even when they start their food truck have someone who is helping them run the truck.

When you hire employees, if you plan on them driving any vehicle other than one the business owns, you need to get hired auto insurance to protect them in the event of an accident.

Your truck, like your personal vehicle, needs to have collision coverage on it.

Collision coverage will protect you in the event your vehicle is in a collision with another vehicle or on its own.

The collision coverage you have on your food truck in Alabama will cover the vehicle if you hit another driver, something stationary, your vehicle overturns or rolls. This is the coverage that will be used if you are in an “at-fault” accident.

When you are shopping for commercial vehicle insurance, you may see comprehensive coverage. This is the coverage that will protect you against anything that isn’t an accident. It will cover:

  • Animal collision
  • Glass
  • Natural disasters

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Business Coverage for Food Truck

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Along with auto insurance that will protect your actual food truck, you will also need coverage to protect your business.

General Liability

No matter which county your business is in Alabama, you need to have general liability insurance to protect the business if something were to happen.

General liability insurance covers all businesses. It protects them in the event your business, your employees, you or your products cause harm or physical damage to someone else or something else.

Property Insurance

Property insurance will protect the things that your business owns. The equipment will be covered under this policy, and you can include a “loss of earnings” option that will protect you in the event you cannot earn money if your property becomes damaged.

While your physical food truck is covered under your auto insurance policies, you also need to get insurance for things like your refrigerator, stove and other equipment.

The property insurance will cover each of these things if they are vandalized, stolen, receive damage from smoke or a fire.

Coverage for Your Employees

Just because you have protected your employees with your other types of insurance doesn’t mean you can sit back and know they are covered under other policies.

You need to have specific insurance policies that will protect both you and your employees from each other.

Workers’ Compensation

Perhaps one of the most important types of coverage you can get concerning your employees is workers’ compensation. In fact, it is illegal to operate a business with employees without having workers’ compensation coverage.

This type of coverage will protect your employees if they get hurt as a result of work. They will get lost wages made up and the insurance policy will pay for any treatment they may need.

When you have workers’ compensation coverage, your employees will not be able to sue you if they are hurt on the job.

Umbrella Policies

An umbrella policy will protect your business from catastrophic losses.

It is important to have because it will cover everything that is involved with your business.

While an umbrella policy must be purchased in addition to other coverage, you can check with different insurance agencies to see if they offer it as a supplement to the coverage you are already purchasing.

Bundling Your Insurance Policies

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Since there is such a broad range of things you will need to cover for your food truck in Alabama, you may want to consider bundling your policies. Talk to insurance agencies to see if you can bundle the insurance coverage for your business.

Benefits of bundling include:

  • Save money
  • Have a simplified insurance bill
  • Policies may overlap

Drawbacks of bundling include:

  • May prevent you from shopping around
  • Different agencies have different coverage options
  • Overlapping policies may give too much extra coverage

Most insurance companies in Alabama will give the maximum legal discount for bundling policies.

Always check with insurance providers in your area of Alabama to ensure you are getting the biggest discount possible. Shopping around can save your business a lot of money.

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