If you are starting up a vending machine business, you may wonder whether you need insurance, and if so, what types.
The quick answer is, “Yes, you need insurance to operate a vending machine business.” In this post, we are going to introduce you to the different types of vending machine insurance and explain what insurance for a vending machine business costs.
Before we jump in with that, let’s explain why it is important for you to insure your vending machine business.
Do I Need Insurance For My Vending Machine Business?
Some people seem to think that it is not all that risky to run a vending machine company. But that could not be further from the truth.
Here are just a few examples of the sorts of things that can go wrong with vending machines:
- Someone could vandalize one of your machines, or even outright damage or destroy it.
- Somebody could steal from one of your vending machines—or even steal the entire machine.
- A customer could say that one of the products they purchased from your vending machine gave them food poisoning.
- While a vending machine is in transit, it could be damaged.
- While products are being transported, they could be destroyed.
- An employee performing maintenance on a vending machine or moving one could get injured.
- The owner of the establishment where your vending machine is installed could complain that the machine damaged the floor when it was being placed.
Those are just a few examples of potential problems that could cost you a lot of money without insurance for vending machine operators.
While you can remotely monitor your vending machines, the reality is that you rarely are going to have a person on-site to watch over them. They are in public places and are exposed to new people and changing conditions day by day. There is a lot of risk there.
Even with just one vending machine, it makes sense to protect your business. Now imagine if you operate dozens or even hundreds of vending machines. At that point, it becomes a question of “when” and not “if” you will need to fall back on your insurance.
Types of Insurance for Vending Machine Operators
Now you know why it is critical to insure your vending machine business. But what types of insurance do you need?
- General liability: This is the most basic type of insurance for a vending machine business. It can cover you if someone claims that you injured them or damaged their property in the course of doing business. So, for instance, if a customer gets a shock from a wire while plugging in your vending machine, general liability insurance would pay out. Likewise, if someone dented their wall while moving the machine, vending machine liability insurance coverage would again have your back.
- Workers’ compensation: If you have employees, you need to purchase workers’ compensation. This is a legal requirement no matter what states you are operating in. The workers’ comp can pay for lost wages and medical expenses if workers get injured or sick while at work.
- Commercial property insurance: You know that general liability insurance can help protect other peoples’ property. But what about your own property? You can buy commercial property insurance to get the coverage you need for the property that is tied to your business.
- Commercial auto insurance: You probably have one or more vehicles that you use to haul around vending machines and/or transport maintenance workers to your machines and back. Commercial auto insurance can protect those vehicles.
- Inland marine insurance: What if you get into an accident on the road while transporting a vending machine, and the machine itself suffers damage? Commercial auto insurance will cover the damages to the vehicle, but not the machine. For that—and to protect other business tools and supplies while on the move—you need inland marine coverage.
- Commercial crime insurance: This type of policy is a big deal for vending machine owners. Alas, it is all too common for people to vandalize machines, steal from them, or even break them. Commercial crime insurance can help you to cover the cost to repair or replace the machine and any damaged or stolen products.
- Cyber crime insurance: Credit card fraud is a potential issue with vending machines. So, it is also worth it to invest in cyber crime insurance.
- Product liability insurance: What happens if you accidentally stocked products that were contaminated, and customers get food poisoning? Product liability insurance can protect you in cases like that.
- Business owners policy: Also called a “BOP” for short, this type of policy rolls together general liability insurance with commercial property insurance and sometimes business interruption insurance.
- Business interruption insurance: If a machine is unable to bring in revenue because of damage, then this policy can help you to replace that lost revenue.
- Equipment breakdown insurance: This type of coverage can kick in if one of your vending machines breaks down, resulting in a loss of income. It will help you to cover the costs to repair or replace it.
- Spoilage insurance: What happens if there is a power outage that results in the products in your vending machine going bad? You can cover your losses using spoilage insurance.
There may be some additional types of vending machine business insurance you will find it beneficial to invest in. But some or all of the above are a great starting point.
How Much is Insurance For Vending Machine Businesses?
The price range we have seen quoted for vending machine businesses is between around $27 and $39 a month.
While that is not a huge range, you probably are looking for ways you can save money on your insurance costs.
What factors impact the cost of vending machine insurance?
- Types of coverages you purchase: Vending machine operators who purchase many types of coverages will pay more than one who just purchases one or two types of coverages. Having multiple coverage types can provide you with better financial protection in the long run, however. This is especially true if your business poses a high risk in some way (i.e. your machines are located in dodgy parts of town).
- Amounts of coverages: Each of your policies for your business will cover up to a certain amount. The higher that amount, the higher the cost for the policy. You can choose a higher or lower amount based on your budget and the risk you are willing to assume. Insurance for vending machine operators is relatively cheap compared to other independent business insurance policies.
- Deductibles: Another feature of each policy that you can modify is your deductible. If you choose a higher deductible, your premiums will be lower and vice versa. There are pros and cons financially to either choice. Ask yourself which is more important for you, being able to save on your premiums, or not having to pay as much out of pocket if you need to make a claim.
- Geographical areas where you operate: This can be a major factor in the cost of vending machine insurance. A vending machine that is located in a corporate office building in a good part of town is probably going to cost less to insure than one that is located outside a convenience store in an unsafe neighborhood.
- How many vending machines you are insuring: The more vending machines you need to insure, the higher the cost will be. Naturally, someone with a network of hundreds of machines is going to be paying a lot more than someone who just has a couple dozen machines.
- What you sell: Some items might be more desirable than others, increasing the chances of theft and vandalism. There is also a higher possibility of certain types of items spoiling. So, the nature of your products may have an effect on your vending machine insurance costs.
- Payroll: Workers’ compensation costs are higher when payroll costs are higher. There are more workers to cover, and if they earn more individually, replacing their lost wages if they get sick or injured will also cost more. So, a business with just a couple of poorly paid employees will have a lower cost for workers’ comp than one with dozens of well-paid employees. Not that we are suggesting you skimp on paying your workers—if you do, that will end up costing you in other ways.
- Discounts: You probably already know from applying for home and auto insurance that many insurance companies offer discounts. They do this for vending machine insurance as well. So, you should find out what discounts you might qualify for when you are deciding on a carrier.
- Claims history: If you can avoid making claims on your insurance, then you will create a track record that suggests you are a safe, low-risk customer. This in turn should reflect in your insurance costs, which will be lower.
- Experience: A brand new vending machine business owner may have higher rates than one who is well-established in this profession. The reason is that the new business owner may not have the experience to know how to mitigate safety risks, making claims more likely. As you build experience, however, your insurance costs may decrease.
- Carrier: Underwriting guidelines are not identical from one insurance carrier to the next. Some guidelines may result in lower costs than others. This is why we recommend that you shop around for quotes from more than one carrier.
Where to Get Vending Machine Insurance Coverage?
Operating vending machines is a riskier business than a lot of people realize. If you are starting a vending machine business, you are going to want to make sure your business is protected. To get the insurance you need now, click below for vending machine business insurance quotes.