What insurance is required for a food truck in Michigan?

Typically, Michigan food truck owners pay $105/mo for a business owner's policy that includes general liability and property insurance. Food truck insurance rates in MI will vary and are based on your location and other factors.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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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...

  • Michigan food truck owners typically pay $105/mo for a business owner’s policy
  • Food trucks that are not owned, but rented, will benefit more from a hired auto insurance policy
  • Collision and comprehensive coverage under a commercial auto insurance policy have higher limits of coverage that are more suited for a food truck
  • In addition to auto insurance, general liability insurance is needed to protect yourself against third-party claims
  • An umbrella policy provides extra protection outside the limits of your insurance policy

The food truck industry is steadily growing in Michigan, which reflects a nationwide trend of small, mobile food businesses increasing in number. The industry’s remarkable rise can be attributed to changing consumer preferences toward gourmet foods at affordable prices.

A successful food truck business is usually characterized by a unique menu, phenomenal food, a good business plan, a serious investment, and proximity to a target market.

As food trucks become more prevalent, state and municipal entities are realizing regulations need to be updated as the industry is evolving.

It is your responsibility to comply with all rules, regulations, and certifications at every level.

Compare auto insurance quotes to make sure you have the coverage you need in place. Enter your ZIP code above and start comparing quotes!

Auto Coverage for Food Trucks in Michigan

In Michigan, auto insurance is one of the most important legal requirements for running a vehicle.

Auto insurance not only helps keep you from being held liable, but it also will protect your investment and your equipment. The question is: What kind of insurance is necessary for running a food truck?

How do I find commercial auto insurance?

State law requires all vehicles on the road to be insured. Any accidents that occur while a vehicle is being used for business purposes may not be covered by a personal auto policy, which is why it is so important to make sure you have commercial auto insurance on your food truck.

Commercial auto insurance covers you in case of an accident with your vehicle. Food trucks are generally larger than what would be considered a personal vehicle and have heavy modifications, so extra coverage is needed.

Commercial auto insurance is similar to a personal auto policy, but it offers higher limits of coverage and coverage for business use.

Essential coverage under a commercial auto insurance policy:

  • Collision
  • Comprehensive

Collision coverage pays for damages to your food truck when it is hit by another vehicle or hits another vehicle. For damages other than a collision, that is where comprehensive coverage kicks in.

An example would be a thief breaking your windows on your food truck. Comprehensive would pay for the window repair.

There are many insurance companies that offer commercial auto insurance. What’s important is to shop around and compare prices. By comparing multiple insurance companies, you could save significantly.

Consider the fact that commercial auto insurance is a safeguard meant to protect your business, so be sure to make a choice that is in the best interest of your business.

What is hired and non-owned auto insurance?

Some small business owners choose to rent their food trucks instead of owning. This is a great option for minimal initial investment and a low-risk way to try out the food truck industry. In this situation, you would need hired insurance.

Hired insurance protects you or your employee while driving the rented food truck.

On occasion, you may ask your employees to run an errand for you. When an employee uses their own personal car for business purposes, they are acting on behalf of the company. Therefore it is important to make sure you have what is called non-owned auto insurance.

Non-owned auto insurance assumes that the vehicle is not owned,

registered or contracted in your name or on your behalf and will protect you against liability.

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Business Coverage for Food Trucks in Michigan

Food trucks are unique to insure because they involve many aspects of insurance. As a food truck owner, you are liable if injuries, illnesses, or damages happen due to your business operations.

Michigan food truck owners typically pay $105/mo for a business owner’s policy that includes general liability and property insurance. Food truck insurance rates are based on the value of your property and equipment, as well as your location.

For example, if a customer gets sick eating your food or if somebody trips and falls over a piece of your equipment and is injured, you could be held responsible.

Claims from unfortunate incidents like these can easily wipe out your business and personal finances and cause your food truck business to close.

General Liability

General liability is often referred to as the core coverage of business insurance. It will provide coverage if you are sued for things like using another business’ registered trademark or making false claims on marketing material.

It will also cover your kitchen equipment and computers.

Property Insurance

Property insurance protects your business’ physical assets. It is appropriate to have whether you own or lease your space. Keep in mind that this policy will only offer protection in the case of covered events.

However, because Michigan is not prone to flooding or earthquakes, you most likely will not need to obtain additional coverage.

Do I Need Coverage for Food Truck Employees in Michigan?

Unless you are a one-man show, you need to have insurance coverage in place for your employees. There are two types of insurance that are applicable for employees:

  • Workers’ Compensation
  • Umbrella Policy

Working on a food truck can be dangerous. Employees involved in making food are around sharp knives, hot stoves, scalding fryers, etc.

Worker’s compensation will help pay for employees’ medical bills and lost wages in the event that they are injured on the job. It is important to note that in Michigan, volunteers are not covered under Workers’ Compensation laws.

An umbrella policy is extra coverage that can be purchased in addition to your current coverage. Not only will it increase the limits for your employees, but it will increase the limits of your other existing policies.

In the event that an extreme situation comes up that transcends your coverage limits, the umbrella policy will kick in and cover the rest. The best thing about an umbrella policy is that it can be customized to meet your business needs.

You may want to discuss with an insurance agent to see if this is something your food truck business could benefit from.

Any type of loss exposure to your food truck business, no matter how small, is too big to ignore. Having the right insurance in place will help you rest easy knowing that you’ll have the protection you need in case something goes wrong.

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