How to test Live USB on VirtualBox Linux...

Plugged in your USB pendrive.

Check your USB drive details:

$ sudo fdisk -l

Add your user to disk group:

$ sudo usermod -a -G disk $USER

Open terminal and run the command below (replace X with your drive). There's no need for sudo:

$ vboxmanage internalcommands createrawvmdk -filename ~/usb.vmdk -rawdisk /dev/sdX

Next open VirtualBox and create new vm. When in the hard disk option, use an existing virtual hard disk file. Select usb.vmdk file that you've created earlier in the previous step.

Complete setup.

Now you can start the newly created vm to test your Live USB.