What insurance is required for a food truck in South Dakota?

Food truck insurance in South Dakota usually consists of a business owner's policy that includes general liability and property insurance. Consider bundling policies for your food truck 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...

  • South Dakota food truck owners and operators are required to buy multiple types of insurance to comply with lender and state requirements
  • Buying insurance is a wonderful way for South Dakota business owners to address potential liability risks
  • Premium payments for various South Dakota insurance policies can impact your bottom line, and you should explore every option available to set up the most affordable coverage with a reputable provider

Across South Dakota, you may have noticed an increasing number of food trucks popping up in shopping centers, at local parks, and in numerous other popular locations.

These food trucks are usually mobile, and they can set up shop in any location where patrons may be hungry for a snack or a meal.

Running a South Dakota food truck business yourself can be life-changing, and you may be eager to get the ball rolling on your mobile restaurant endeavor.

If you are interested in opening a food truck business in South Dakota soon, you should treat this endeavor as you would any other type of new business venture.

Proper research and planning for all operational risks and expenses is necessary so that you can be properly prepared for all aspects of running the business.

After you have identified risks that you may face through business activities or while driving the food truck, you may explore different types of insurance suitable for food trucks in South Dakota. Some types of insurance are even required by law or by a vehicle lender.

While you need to buy South Dakota food truck insurance products to address risk factors, you also need to keep costs as low as possible.

Bundling insurance policies and shopping around to compare rates available from different providers can help you to save money on your expenses. Enter your zip code into our free comparison tool above to find the best rates for the coverage you need.

Coverage Available for Food Trucks in South Dakota

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When you run a South Dakota food truck operation, you likely drive a commercial vehicle across town or even throughout the state on a regular basis. More than that, you serve customers daily, and you may even have employees working in your food truck for each.

Each of these factors carries risk that could be addressed with different types of business or auto insurance coverage.

Commercial Auto Insurance

Unless you plan to permanently park your food truck in one specific location indefinitely, you will need to buy and maintain commercial auto insurance for the truck.

South Dakota has minimum liability insurance requirements that all personal-use and commercial-use vehicles must comply with.

Remember that a liability auto policy pays for another person’s vehicle repairs or medical expenses if you cause the accident, but it will not pay for any of your food truck’s repair bills.

Hired and Non-Owned Auto Insurance

Financing a food truck with a vehicle loan is one way to pay for the vehicle that you work out of, but you could also lease a food truck from another party. When leasing a food truck in South Dakota, you need to buy hired and non-owned auto insurance.

This option is a unique type of auto coverage that is suited for leased vehicles that are used for business purposes, such as a rented food truck.

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Collision Coverage

Because liability coverage on a South Dakota food truck only pays for other people’s expenses in the event of an accident, many food truck owners also buy collision insurance.

This option is a not a state-required coverage type, but your truck lender may require either this or comprehensive coverage.

Collision insurance only pays for vehicle repairs if your truck is damaged in a collision, and comprehensive insurance pays for repairs if your truck is damaged by many other types of events.

Comprehensive Coverage

Like collision insurance, comprehensive insurance on a South Dakota food truck is not required under the state’s auto laws. However, this may be a lender requirement if your truck is financed through a third-party lender or bank.

You can reasonably expect comprehensive insurance to pay for damage caused by the following:

  • wildlife
  • weather conditions
  • criminal actions

General Liability

Business liability insurance is also required for all businesses in this state. You could face business liability risks associated with the operational activities of your business, such as serving tainted food to your customers or causing a burn if the food you serve is too hot.

This type of business insurance is not related to the movement of your food truck on local roads, and it could pay for any liability expenses and legal expenses your business incurs.

Property Insurance

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The kitchen equipment and other add-ons inside your food truck are considered to be personal property, and they are not usually covered under a collision or comprehensive auto insurance policy on a South Dakota food truck.

You will need to buy separate personal property insurance if you want coverage on these important items.

Another important kind of property insurance that may be relevant to your business is real estate insurance.

If you are one of several local food truck owners who has purchased land for your food truck business and if you have developed the land with picnic tables, landscaping, lighting features, or other elements, property insurance could be used to cover losses on these improvements.

Workers’ Compensation

The need to hire employees is common for South Dakota food truck owners, but employees could easily be injured while on the job.

Workplace injuries could result in substantial medical bills and other related expenses that you could be held responsible for, and workers’ compensation is a required type of insurance in South Dakota that can be used to offset many or all of these expenses.

Umbrella Policy

Another way to protect your South Dakota food truck business from unnecessary financial loss is to buy an umbrella policy.

An umbrella insurance policy for your food services business could provide incredible employee benefits as well as a full range of other business benefits that you may need over the years.

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Bundling Your South Dakota Food Truck Insurance

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Some business owners will shop around to buy coverage from multiple providers, taking advantage of the lowest rate they can find for each auto or business coverage type they need.

Other food truck owners will bundle their various insurance policies together with one provider to save money through a bundled coverage discount.

Comparing both possibilities will help you to identify the most affordable insurance structure for your South Dakota food truck business to use.

Enter your zip code into our free rate comparison tool below to find the best coverage for your needs.

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