What insurance is required for a food truck in Texas?

Food truck insurance in Texas typically consists of an owner's policy that includes general liability and property insurance. Compare quotes online 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...

  • Texas food truck insurance requirements may vary depending on your city location
  • A business plan for your food truck should include expected costs, including insurance
  • You will need to study the permit requirements for Texas food trucks before starting your food truck business

A business plan will help you be more successful when you start your food truck. The plan will allow you to have a complete overview of everything your food truck can include.

You should account for expenses, plan the food you are going to serve and keep track of any insurance you may need for your business.

When you create your business plan, also consider whether you are going to hire employees now or in the future.

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Your Business Plan

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A Texas food truck business plan can include as much or as little information as you want. In general, you should consider the basics you’ll need to start your food truck. From there, you can build on your plan and expand it to suit all the needs you will have in the future.

It is a good idea to keep your business plans organized into categories. You should have the following plans:

  • plan for the food truck and equipment
  • a plan for how you are going to profit
  • a plan for expenses like insurance

Texas also has checklists you can put into your business plan that will help you mark each thing you’ll need to do to get your food truck permit.

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Truck and Equipment

Your food truck will be where you do most of your business. Find a food truck that you can use for the food you are going to serve. You should always make sure it is in good running condition or be prepared for the expense of fixing it.

Since you’ll probably be making modifications on the truck, it is often not worth it to buy one brand new.

Equipment, though, can be a worthy investment if you buy brand new. Purchasing your refrigerators and cooking equipment new can help you save money on repairs in the future. Your equipment should meet the food safety guidelines.

The costs of your food truck will determine the profits you can make. Many people don’t understand all the costs they will incur from insurance so keep that in mind.

When you’re shopping around for insurance, get exact quotes for the minimum insurance Texas requires so you can use them in your business plan.

Food Truck Insurance Choices in Texas

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Since insurance is what will protect you in case the unexpected happens, it is a very important part of your business. You will want to shop around for the best price with the most coverage to get the best deal in insurance.

Auto Insurance

Commercial auto insurance is different than personal vehicle insurance because it allows for higher limits. You cannot use a personal insurance policy for your food truck since it is being used for business.

All of the elements of your commercial auto insurance will be in one policy. The policy can include any coverage that you may want. The most common coverage options are:

Texas state law requires you have uninsured motorist, collision and medical payment insurance as their state minimum, but comprehensive and hired car coverage will protect you.

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Hired

Your business can benefit from hired car insurance if you are planning on asking employees to drive their own vehicles for work purposes. Hired insurance will cover them while they are using their own vehicle and protect you.

Collision and Comprehensive

Turns, rolls, collisions with stationary objects and other vehicles can all be included with collision insurance.

Some businesses skimp on comprehensive coverage for their commercial vehicles, but it can be beneficial if you have a food truck. Since they are more prone to fires, comprehensive will cover them.

Comprehensive insurance will also cover theft, broken glass and damage sustained from animals.

Insure the Business

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Some food truck owners may think they are covered once they have a commercial auto policy. Once you purchase the commercial auto policy, you will need to also insure the business because the auto insurance only covers the vehicle.

Liability

Texas state law requires you to have liability coverage up to one million dollars. Some food truck owners may want to include higher limits, but you will need to talk to insurance agents about what coverage you will need for your food truck business.

Liability insurance covers any damage to another person or property that you may be at fault for. Along with liability requirements, insuring your own property can also protect you in different ways.

Employee Insurance

While you may offer your employees a health insurance plan, you need to take out a policy for the employees you have. Employee insurance is what will protect you if something catastrophic happens with your employees.

Worker’s Compensation Law

Across the United States, there are federal guidelines for worker’s compensation. While most states follow these rules, Texas is one that doesn’t make business owners invest in worker’s compensation insurance.

Without worker’s compensation insurance, you put yourself at risk for costly lawsuits.

Umbrella Business Coverage

Not only will umbrella coverage protect you from catastrophe with employees but it will also protect your entire business. As the name implies, umbrella policies cover everything.

Bundle for Saving

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Shopping around will give you a chance to see how you can bundle your policies to save extra money.

Perhaps one of the biggest benefits of bundling insurance policies is saving money.

Texas insurance agents are able to give up to 35 percent discounts for bundled policies. You can also simplify your costs by having one bill for all your policies.

One of the biggest problems that food truck owners may see when they bundle their policies is that their coverage overlaps. They end up with too much coverage for things they will never be able to use.

You may also not be getting the most experienced insurance agent. Shop around first to find one that can offer you the best business, auto, and employee coverage.

An easy way to increase your profits is to just decrease your costs. Consider all of the ways you can save money, like comparison shopping and bundling, so you will have a chance to make more profit.

When you talk to your insurance agent, get a good recommendation for the best coverage at the lowest price.

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