With minimal overhead expenses, no cashiers, and usually no public access to your main business location, owning and operating vending machines may at first appear to have very little risk. However, there are quite a number of unique exposures associated with vending machines, including vandalism risks and credit card fraud. Vending machine operators must carry a wide range of business insurance in order to protect their business from unexpected disasters and injuries. 

What insurance coverage do I need for my vending machine business?

While there are many types of coverage for companies to consider, these insurance policies are particularly important for vending machine operators:

Commercial Crime Insurance

Theft and vandalism are common occurrences for vending machines. After all, they are often left unguarded, filled with products, and usually contain money from previous transactions. The cost to replace or repair the machines can be financially draining to your business. This is where commercial crime insurance comes in. 

Commercial crime insurance provides protection for businesses from financial losses resulting from criminal acts. This includes forgery, robbery, burglary, and theft. Unlike other policies, such as commercial property insurance, this coverage even protects your business from employee dishonesty. If your employee is responsible for collecting cash from your vending machines and pockets the money instead, your insurer can provide funds to compensate your business for this offense. 

Example:

• Overnight, one of your vending machines is broken into. Thieves steal the inventory and the cash that accumulated within the machine. Your commercial crime insurance would provide coverage for the loss. 

Workers’ Compensation Insurance

Your employees are often required to lift and move your heavy vending machines. This act can cause back injury, hernia, sprains, and strains. Although employees should be provided with safety equipment, training on proper handling techniques, and access to devices that can assist with heavy lifting, accidents are impossible to completely avoid. 

Workers’ compensation insurance provides financial and medical benefits to employees who suffer work-related illnesses or injuries during the course of their work. This coverage includes the employee’s medical expenses, rehabilitation, and a portion of lost wages. 

Almost every state requires businesses with employees to carry workers’ compensation insurance, and there can be severe penalties if your business is found to be in violation of any local workers’ comp regulations. Make sure you check in with your local laws to ensure that you’re operating in compliance.

Example:

• While transporting vending machines to a new location, one of the machines falls over and crushes your employee’s foot. Your workers’ compensation insurance would provide funds for his medical fees, surgery, rehabilitation costs, and a portion of his lost wages while he is unable to work during recovery. 

General Liability Insurance

General liability insurance covers incidents of unintentional third-party property damage and bodily injury. There are various ways that your vending machine can cause injury to a customer. If the wires and cords are not securely laid down, customers and other third parties may trip and fall. If the vending machine is not stable, there is a chance that it can tip over and injure an individual or third-party property nearby.

General liability insurance will also protect your business if a product sold from your vending machine leads to injury or illness. If food is contaminated, improperly refrigerated, or spoiled, customers could get sick. Patrons could also have allergic reactions to food sold in your vending machines, or if your machines distribute hot beverages, customers could suffer burns.

Examples:

• Bodily injury: A customer trips on the cord powering your vending machine and sprains his wrist during the fall. Your general liability insurance would pay for his medical treatment and legal fees if the injured customer sues your business.
• Product liability: One of the snacks sold in your vending machine does not come with a proper warning that it contains nuts. After consuming the snack, one of your customers develops a severe allergic reaction that requires medical attention. If he sues your business, your general liability insurance will cover the legal fees of this lawsuit. 

Commercial Auto Insurance

If your business owns and operates a vehicle—such as a delivery truck—that is used to transport vending machines and other goods for business purposes, commercial auto insurance is a vital form of coverage that can financially protect your business in the event of an auto accident. 

Commercial auto insurance covers damages if you or one of your employees are at fault for an auto collision while driving a company vehicle. This coverage includes third-party bodily injury and property damage. Commercial auto insurance also covers your company vehicles if they are damaged or lost due to theft, vandalism, collisions, or other covered hazards. 

Example:

• One of your employees is driving your company’s truck to refill your vending machines with goods. He makes an illegal turn and crashes into another vehicle. Your commercial auto insurance would cover damages to both vehicles.

Inland Marine Insurance 

Inland marine insurance provides financial protection for your business property that does not remain at a fixed location and is not covered by a standard commercial property insurance policy. 

Your standard commercial property policy may provide some protection for limited amounts of property taken offsite, but high-value equipment or goods that are being shipped require inland marine insurance. This could include equipment, tools, and other items that your company may need to transport while your employees travel from one vending machine site to another. In fact, transporting vending machines themselves can prove to be a risk because vending machines are heavy and can be damaged during transport by overturning or collisions.

Example: 

• One of your employees is driving some new vending machines to their location when the delivery truck is involved in an auto accident. The expensive vending machines are severely damaged. Your inland marine insurance would pay for you to repair and replace the damaged machines. 

Cyber Liability Insurance

If your vending machines accept credit or debit cards for payment, there is a potential for cyber theft of customer data. Cyber liability insurance financially protects your vending machine business from various technology-related risks, such as damages resulting from hacks, data breaches, denial of service attacks, and viruses. In the event of a data breach, this coverage financially protects your business if you are sued by customers, employees, or other third parties for failing to protect their data. 

Vending machines are particularly at risk for a scam called “skimming.” Thieves may attach a device called a “skimmer” onto your vending machine and when a customer inserts their credit or debit card, their information and account details may be compromised. Vending machine operators, not banks, are liable in case of credit card fraud. 

Example: 

• A skimmer is placed on one of your vending machines and many customer credit card details are stolen. Your cyber liability insurance will provide funds for legal fees and settlements should your customers sue you for this data breach. 

Commercial Property Insurance

Commercial property insurance is an important consideration if you own a warehouse or business space used for stocking your inventory and storing out-of-service vending machines. Commercial property insurance protects the value of your business’s property by providing funds for repairs or replacements if your property is damaged or destroyed by a covered peril, including fire, theft, vandalism, windstorm, and water damage.

Example: 

• A fire breaks out in your storage location and much of your inventory is destroyed. Because fire is a covered peril, your commercial property insurance would provide funds to replace the destroyed goods. 

Additional Coverages 

• Spoilage insurance financially protects your business in the event of lost perishable goods due to power outages or equipment failures. For instance, if a power outage shuts down the refrigeration system of your warehouse, your spoilage insurance would reimburse you for any inventory lost due to spoilage. 
• Equipment breakdown insurance covers the repair or replacement of malfunctioned or damaged equipment. This is an important consideration because the breakdown and loss of your vending machines or your warehouse refrigeration equipment can result in a significant financial loss. Equipment breakdown insurance can be added to your commercial property insurance policy as an endorsement or purchased as a standalone policy.
• Business income insurance, also known as business interruption insurance, provides coverage for loss of income and operating expenses if your machines are temporarily out of business due to property damage. Business income insurance can provide funds to address your lost income or revenue while your business recovers from property damage.

Pricing and Quotes

Pricing for business insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:

• Business size
• Industry
• Location
• Number of employees
• Claims history

Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a vending machine operator with a history of frequent claims will face higher premiums. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.

In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer coverage for vending machine businesses:

Provider	General Liability	Professional Liability	Business Owner's Policy
Embroker	??	??	??
CoverageSmith	??	??	??
CoverWallet	??	??	??
Hiscox	??	??	??
Thimble	??	??	??

Final Word

When you own and operate vending machines, disasters like power outages, accidental injuries, and theft can all have a devastating impact on your business. Obtaining a range of business insurance is a critical step that will protect your business from the financial consequences of unforeseen events.