What Types of Insurance Does a Hot Dog Cart Need?

Starting a hot dog cart can be a great way to enter the food service industry with a low investment. Hot dog carts are typically less expensive than brick-and-mortar restaurants, and they offer a high degree of flexibility in terms of hours and location. However, operating a hot dog cart is not without its challenges – from the menu to the price point, and of course, insurance. 

Insurance may not be the most exciting part of starting a hot dog cart business, but it is very important.

Related: Guide to starting a hot dog cart

What Are Some Risks for Owning a Hot Dog Cart?

Since hot dog carts are mobile businesses that cater to many people, there is an increased risk of hazards. Some of those risk factors include:

• Theft
• Car accidents
• Spoiled food
• Employee injuries
• Customer illnesses or injuries

Theft

Robberies are problematic for mobile food vendors. Several factors increase the risk of robberies, but the main reason is that hot dog carts primarily operate on a cash basis. Hot dog carts are not very secure and carry a lot of cash, which makes them a target. 

Car Accidents

Hot dog carts will generally need to be transported to the site each day, and should the cart be damaged while in transport, or is in a traffic accident, insurance will be needed. 

Spoiled Food

Since hot dog carts sell food and drink, there is a risk of customer illness or injury from consuming contaminated food or spoiled products. Customer injuries can also occur from allergens, improper storage, and foreign objects found in the food. In addition, bacteria, such as E. coli and salmonella, are foodborne illnesses that can cause severe illness and may result in a lawsuit.

Some causes of food spoilage or contamination include:

• Poor cleaning procedures
• Mechanical failure of refrigeration equipment
• Ill employees who work while they are contagious

Employee Injuries

Employees who work at hot dog carts are at risk for a number of injuries, ranging from minor cuts and burns to more serious injuries like slip and falls. One of the most common injuries is a burn, which can occur when employees come into contact with the hot grill or boiling water. Employees can also be injured by sharp objects, such as knives and skewers while preparing food. In addition, hot dog carts are often located in busy areas, which increases the risk of employees being struck by cars or pedestrians.

What Types of Insurance Policies Should a Hot Dog Cart Business Consider?

When you operate a hot dog cart, you face a variety of risks. From customers slipping and falling to the cart being damaged or stolen, there are many ways that you could end up incurring costly expenses. Some of the insurance policies that a hot dog cart should consider include:

• General liability insurance
• Crime insurance
• Commercial automobile insurance
• Product liability insurance
• Workers’ compensation insurance

General Liability Insurance

Any business owner knows that protecting their investment is important, and hot dog cart owners are no exception. Hot dog cart general liability insurance is a type of insurance that can help to protect your business in the event of an accident or injury. For example, if a customer slips and falls while waiting in line for their hot dog, you could be held responsible for their medical bills. Or, if your hot dog cart catches fire and damages property, your insurance can help to cover the cost of repairs.

Hot dog carts benefit from this general liability coverage because it covers potential injury or illness claims resulting from the food. More importantly, some vendors, landlords, and commercial kitchens require hot dog cart owners to have a certificate of insurance before allowing a cart to set up.   

Fortunately, a general liability policy covers claim expenses, including:

• Medical benefits
• Property damage repairs
• Legal fees
• Settlements

Crime Insurance

As a hot dog cart operator, you have to be prepared for anything. One of the things you have to worry about is crime and is why crime insurance is so important. This insurance will protect you from theft, vandalism, and other crime-related damages to your hot dog cart.

Businesses that deal with cash transactions or have cash that passes between employees benefit from crime insurance since cash is a common target for theft. 

Commercial Auto Insurance

A standard commercial automobile insurance policy includes two primary coverages: liability insurance and physical damage insurance. A hot dog cart is exposed to both risks and needs a policy that covers both exposures.

First, the liability coverage insures the business for claims of bodily injury and property damage that result from at-fault car accidents. A commercial automobile policy covers claim expenses up to an agreed policy limit. Policy limits are variable but should be adequate to protect the business’s assets. Usually, the per-incident coverage limit starts at $500,000 or $1 million of coverage.

Most personal car insurance policies won’t cover an accident when there is business activity, such as transporting a cart to a site, so commercial auto insurance will be needed to protect your personal vehicle, trailer, and the cart.

Product Liability Insurance

As a hot dog cart owner, you are responsible for the safety of your customers. That’s why it’s important to have the right insurance in place to protect your business. This type of insurance protects you from being sued if someone gets sick or injured after eating one of the hot dogs you sell. While the cost of this insurance may seem like an unnecessary expense, it’s important to remember that even a small claim can quickly become very expensive. If you’re found liable for an injury, you could be responsible for medical bills, lost wages, and even pain and suffering. 

Workers’ Compensation Insurance

A workers’ compensation policy covers an injured employee’s expenses, including the following costs:

• Medical payments
• Lost income
• Ongoing rehabilitation care
• Disability income
• Funeral expenses

Many states require that businesses with employees carry workers’ compensation policies; however, regardless of the state’s requirements, a business with employees benefits from this policy. The policy covers the employee’s expenses, but it also protects the business from expensive lawsuits.