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What kind of liability insurance will I need?

I'm starting up a mobile baked goods company. Plan is to go to farmers markets as well as traveling around in mobile truck. what kind of coverage am I going to need? The kitchen I'm planning on renting requires Limited Liability, but do I need anything else?

May 23, 2012 by Tracie from San Marcos, CA in  |  Flag
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9 votes
Sean McClay Level 13

First off I would recommend you talking with an Attorney to make sure the company is set up correctly (ie LLC, Inc, etc), as to make sure you have taken as much liability off you individually as possible. Also I would recommend making sure your auto insurance covers "business" activities, and if it does not make sure you get that covered. You probably need to sit down with an individual in your are that specializes in insurance for small business. I would recommend an independent insurance agent so they can get you quotes from several different carriers. Also make sure to get some suggesstions from the insurance agent and then go home and google the type of insurance you talked about to make sure that is exactly what you desire to cover, because alot of times you could be insurance rich and cash poor. For a new business that could spell disaster, so I would have the insurance agent rank what you need in order of necessity. Also it may not be bad to check with someone who does the same thing as you wether in your town or in a different town near by to find out what they do. Best of luck.

Comment   |  Flag   |  Jun 01, 2012 from Daphne, AL

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7 votes

Dear Tracie,

Congratulations on your new venture! You must be very excited. You are very smart to ask this question in the beginning. It shows how serious you are in launching your endeavour.

I can give you some general information here. However, you should sit down with someone specializing in Property and Casualty (or P&C) insurance to make sure you get the proper level and areas of coverage. I'm certain others will add to this list, however, here are a few areas you will need to consider:

  • Liability coverage for the truck. This would be similar coverage to the liability coverage you would take out for any vehicle. However, there may be higher limits of liability required due to the commercial nature of the vehicle.
  • Liability coverage for operating out of the truck (e.g. in case a customer is hurt by something falling from the truck)
  • Product liability coverage in case someone claims illness from food (may be part of overall policy)
  • If you have employees (even part time), you will need Workers' Comp insurance.
  • If you do have emplyees (even contractors paid on 1099), make sure you are covered by any acts they may cause. In this way, if a contractor spills hot coffee on a customer, you will still be covered.

Now- if i can make a suggestion- nothing beats a good nutty tasting bran muffin while enjoying the morningpaper and coffee...... just saying.

Comment   |  Flag   |  May 26, 2012 from Permanente, CA

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Call an independent agent that offers commercial insurance. Buy a good policy and then consider an umbrella policy to take your limits even higher.

Comment   |  Flag   |  Jan 14, 2015 from Loveland, OH

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-3 votes
  1. Call a specialst insurance agent who can outline what you need.
Comment   |  Flag   |  Jun 01, 2012 from Plano, TX

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