Vending machines provide a way to continuously sell merchandise. They are available around the clock, day after day, making the business a profitable one. Further, these machines provide convenience to customers during times of waiting, like in an airport. Customers tend to make purchases from the machine because it is available and easy to use.

Since vending machines are often located on property the vending machine operator doesn’t own, the property owner may require to see a valid certificate of insurance (COI), which is proof of business insurance.

With the technological improvements made on vending machines, spending has become even easier. As fewer people carry coins or cash on hand, they can still access the amenities of a vending machine by paying with a card or sometimes a cellphone. Vending machines are used frequently, which means their exposure to loss increases. A business can best protect vending machine operators from financial loss by having insurance to cover the risks.

Related: Guide to starting a vending machine business

What Are Some of the Risks for a Vending Machine Business?

Vending machine businesses run into a few risks throughout their regular operations.

Some risks include:

• Car accidents during deliveries
• Damage to machines or stock while they are being transported
• Customer injury due to faulty products
• Theft and vandalism
• Employee injury

Car Accidents

Car accidents can happen when an employee is en route to restock, maintain, or service a vending machine. As the machines are in various spots—like amusement parks, schools, offices, bars, and shopping centers—the employees will be doing a considerable amount of driving.

Damage to Machines and Stock

Vending machines and the stock which fills the machines are in transport regularly. Machines may be relocated or replaced, and that means that they are moved from time to time. This exposure means that there is a risk of damage to the machine during transit. The same is true for the stock; it is regularly in transit, being shipped to different locations. A vending machine business needs insurance coverage for damage to company equipment and materials.

Customer Injury

Because food and beverages are sold in vending machines, there is a risk that customers may be injured or may become sick from food poisoning. Expired products, products that have not been warmed or chilled properly, and contaminated products are all issues that vending machine businesses face.

Theft and Vandalism

The nature of vending machines makes them vulnerable to theft and vandalism. The machines will store a considerable amount of cash or are at risk for cyber theft, where scammers install a credit card skimmer on the machine to capture credit card data.

Another concern is machines could be vandalized in locations with minimal protection or security. Moreover, when the machines are being restocked or serviced, there is a risk of the employee being targeted for theft while the machine is open and the money is accessible.

Employee Injury

During the transportation of products, an employee may be injured.  Injury can happen while unloading the vehicle or transporting items to the vending machine.

Types of Vending Machine Business Insurance to Consider

Insurance is meant to provide security to businesses to prevent financial hardship when a loss does occur. Although it will not prevent a loss from occurring, vending machine insurance helps to cover the costs associated with the loss. A vending machine business should consider the following types of coverage: automobile, inland marine, general liability, crime insurance, and worker’s compensation insurance.

1. Commercial Auto Insurance

Commercial automobile insurance covers the business’s vehicles. A vending machine business will use vehicles to:

• Deliver stock to leased and owned machines
• Transportation of the machines to provide maintenance or service
• Moving the vending machines to another location

The commercial auto policy covers:

• Liability
• Damage
• Medical bills

In the event of an accident, liability coverage pays for physical damage and injuries to the other party. Coverage is also included for the business’s vehicle, should it be damaged due to an accident or non-accident event (like a tree falling on the vehicle or it being vandalized). Additionally, the policy provides coverage for medical payments for the driver.

In most cases, a personal auto insurance policy won’t cover an accident when the vehicle is being used for business purposes.

How Much Does Automobile Insurance Cost?

An automobile policy will fluctuate in cost depending on the number and type of vehicles being insured. An expensive, specialty vehicle is going to cost more on the policy than a standard van as the specialty vehicle is more expensive to repair or replace. However, a typical business vehicle insurance policy will cost between $900 – $1,200 annually.

2. Inland Marine Insurance

An inland marine policy is a type of insurance that provides coverage for property and equipment that is shipped by land. The exposure for a vending machine business is significant because the vending machines and the stock for the vending machines are transported frequently by land via trucks or trains. During shipping, the carrier does not insure the goods so that an inland marine policy will cover possible exposures.

The exposures during transit are:

• Products becoming spoiled because of an accident (i.e., food and soft drinks)
• Theft
• Damage to equipment

Transit coverage reimburses the cost of goods and products that are damaged during transit, and an equipment floater covers the cost of damage to devices and equipment—such as forklifts, tools, and repair gear.

How Much Does Inland Marine Insurance Cost?

The average cost of an inland marine insurance policy is $2,500 annually. This figure is an average estimate, and the actual price will depend on the value of the shipment and equipment.

3. General Liability: Products – Completed Operations

A general liability policy provides coverage for claims and lawsuits over bodily injury and property damage due to the products or services provided by the vending machine. A vending machine business has a considerable amount of risk in this category. Customers may become sick if the vended food is contaminated, expired, or poorly maintained (for example, refrigerated products that are not kept chilled at a safe temperature).

Possible reasons that products cause a liability claim are:

• Cold food not kept cold and hot food not kept hot
• Expired items (food, drink, and makeup)
• Regular cleaning on machines that make custom food and drink is not done (for example, coffee machines or sandwich machines)
• Pest infestation
• Vandalism
• Hazardous nonfood items are sold where minors can purchase (lighters, medications, cigarettes)

This general liability policy pays for claims, including legal fees, settlements, and damages.

4. Commercial Crime Insurance

Vending machines hold both money and merchandise, making them vulnerable to theft or vandalism. Another potential crime risk is employee dishonesty. The employee, who has access to the vending machine’s funds and stock, may steal from the business. Careful screening of new employees can help with this, but insurance is also helpful.

A crime insurance policy (also called fidelity insurance or employee dishonesty insurance)covers:

• Employee dishonesty
• Insured’s property
• Money
• Fraud

Although theft cannot be prevented, a crime policy can help recover lost funds. The commercial crime insurance policy does not cover claims for accounting errors or theft, and fraud committed by the insured or any partners.

How Much Does Commercial Crime Insurance Cost?

Commercial crime insurance will cost $600 – $750 annually based on $500,000 in coverage.

5. Workers’ Compensation Insurance

Workers’ compensation insurance, sometimes called workers’ comp, covers the medical expenses and loss of income if an employee is injured on the job. Falls, concussions, cuts, and broken bones can all happen as the employees move products from the truck to the machine.

Proper training, experience, and supervision are essential to protecting employees from harm, but when an accident does occur, insurance helps cover the business from additional liability.

Workers’ comp insurance covers:

• Medical expenses
• Funeral costs
• Disability
• Lost wages
• Illness (for example, illness due to chemical exposure)

How Much Does General Liability Insurance Cost?

General liability insurance is a policy that can be paired with another policy, such as a commercial property insurance policy. On its own, a general liability policy costs between $300 – $1,000 annually.

How Much Does Vending Machine Business Insurance Cost?

Vending machines offer an excellent way to diversify and expand a small business. From selling soft drinks to amusement games, there is a wide variety of merchandise and experiences to sell. Since the business’s products and services are spread out in many different areas, it is important to bolster the business with a balanced business owner’s policy to cover the risks.

A quick look at the policies are:

• Automobile – $900 – $1,200 annually
• Inland marine – $2,500 annually
• General liability – $300 – $1,000 annually
• Crime – $600 – $750 annually
• Workers’ compensation – $2,000 – 3,000 annually

Generally speaking, a vending machine business can expect to pay between $6,300 and $8,450 per year on business insurance coverage.