What Type of Insurance Do You Need To Run a Vending Machine Business?

While “vending machine insurance” typically isn’t a specific product sold, you can purchase several types of coverage like general liability and commercial property insurance to protect your vending machine business. Since vending machines can be positioned in different areas, you will need to consider the risk factors of each location such as local crime rates and weather conditions.

Remember: every vending machine has liability exposure, whether it dispenses food, electronics or toys. Read what your insurance obligations and options are, as well as how much coverage will cost.

Key Takeaways There is no federal law that requires vending machine businesses to have insurance but buying coverage is recommended. General liability insurance can protect a vending machine business if it is held responsible for personal injury or property damage to a customer or client. Commercial property insurance can cover the costs of repairing or replacing damaged equipment, inventory, and other business equipment in case of robbery or vandalism. Business interruption insurance can help protect a vending machine business from lost revenue if it temporarily closes due to a covered peril. On average, general liability insurance costs $360 per year and adding other coverage can increase your premiums by several hundred dollars.

Is Insurance Required To Run a Vending Machine Business?

There is no federal law that enforces vending machine businesses to have insurance. However, depending on the specifics of your vending machine business and where your business is based, there may be some requirements.

For instance, many states require employers to carry workers' compensation. If you have people working for you, there's a good chance you'll be required to maintain workers’ compensation insurance.

Commercial auto insurance is another coverage you will need if you employ workers to transport vending machines and inventory in motor vehicles.

What Types of Insurance Should a Vending Machine Operator Consider?

While you can never go wrong with the broad coverage afforded by having a business owners policy, other insurance types like product liability and equipment breakdown insurance can provide your vending machine business more comprehensive protection. See below for the various insurance plans you can get along with the monthly cost for each insurance type.

General Liability

Monthly Rate: $30^[1]

General liability insurance (GLI), also known as commercial liability insurance, can provide financial protection for your business in the event that it is held responsible for personal injury or property damage to a client or customer. While GLI can offer compensation up to the policy limits, you may choose to obtain a separate umbrella policy for additional coverage.

Your business could be held liable for damages in various situations, including:

• If a customer trips and sustains injuries on your premises due to uneven flooring
• If your business is accused of misleading advertising and a legal claim is filed against you
• If a customer contracts food poisoning after consuming food purchased from your vending machine

Commercial Property

Monthly Rate: $25 to $100+^[2]

In the event of a break-in, robbery or act of vandalism at your place of business, commercial property insurance can cover the costs of repairing or replacing damaged equipment, inventory, receipt printers and other physical business items. 

Business Interruption

Monthly Rate: $50 to $150^[3]

Business interruption insurance is a type of coverage that can help protect your vending machine business from lost revenue if it has to temporarily close due to a covered peril, such as a break-in that results in inventory damage, equipment breakdown (i.e. vending machines) or a fire that damages part of the building. This type of insurance typically covers the following:

• Revenue that would have been generated if the business had not been forced to close
• Payments for commercial leases, rent and mortgage loans
• Taxes that would have been paid if the business had been operating normally
• Payroll for employees during the period of closure
• Relocation expenses, such as rent for a temporary location or moving costs
• Employee training on new machinery or equipment following an insured loss

Business Owners Policy (BOP)

Monthly Rate: $261^[4]

A business owners policy (BOP) is a comprehensive insurance product that combines liability, property and usually business interruption insurance into a single, convenient package. This type of policy is a popular choice among small businesses and certain mid-size businesses because it offers ease and savings.

Product Liability

Monthly Rate: $99^[5]

Product liability refers to the legal responsibility of manufacturers, distributors and sellers for injuries or damages caused by their products. Product liability insurance claims can arise from various types of defects, including design defects, manufacturing defects and marketing defects (such as inadequate warning labels or instructions). An example would be if your vending machine dispenses a soda that rolls out and lands on top of a customer’s foot, breaking their big toe.

Equipment Breakdown

Monthly Rate: $67^[6]

Unlike commercial property insurance which typically covers losses caused by external forces such as fires and vandalism, equipment breakdown insurance covers sudden mechanical or electrical breakdowns like electrical shorts and motor burnouts. Considering that vending machines and the machinery used to install them are central to a vending machine business, having equipment breakdown coverage can be invaluable.

Employment Practices Liability

Monthly Rate: $67 to $250^[7]

Employment practices liability insurance (EPLI) is a type of coverage that can help protect your business from claims made by employees for potential violations of labor laws. This type of insurance typically covers claims related to issues such as wrongful termination, discrimination, sexual harassment and retaliation.

For instance, if an employee alleges that they were denied promotion opportunities for illegal reasons, EPLI coverage can help protect your business from the financial impact of a potential lawsuit. Insurance providers often sell this coverage as a standalone policy or as an add-on to a business owners policy.

Professional Liability

Monthly Rate: $18^[8]

Professional liability insurance, also known as errors and omissions (E&O) insurance, typically offers coverage for claims related to negligence, misrepresentation, incorrect advice and personal injuries such as libel or slander. For instance, if a vending machine company is sued by a client who alleges that the company falsely claimed to restock their product on a weekly basis, E&O insurance can help cover the associated legal costs.

Cyber Liability

Monthly Rate: $25 to $100^[9]

Cyber liability insurance is a type of insurance policy that provides coverage for businesses in case they suffer a data breach or other cyber-related losses. Any vending machine business that accepts debit or credit card payments is at risk for cyber attacks. In particular, there is a type of thievery known as skimming, where the thieves will attach a device that reads card information and create a data breach for the customer.

Your cyber liability insurance policy will help cover expenses associated with investigating the incident, notifying affected parties and providing credit monitoring services to affected individuals. The policy may also cover the cost of legal fees, settlements or judgments and other expenses related to defending against a lawsuit resulting from the breach.

Commercial Auto

Monthly Rate: $75 to $200+^[10]

Commercial auto insurance offers liability coverage and can provide protection against physical damage for vehicles used for work-related purposes. This type of insurance is similar to regular auto insurance but is specifically designed to cover vehicles that are used for business purposes. For example, if your vending machine business also handles transporting and installing units and restocking them, you would benefit from having commercial auto insurance.

Inland Marine Insurance

Monthly Rate: $61^[11]

Inland marine insurance is a type of insurance policy that provides coverage for your vending machines while it is being transported or temporarily stored at a location other than your primary business address. In addition, vending machines you own that are stationed in other locations, like malls, plazas and other businesses, may be covered under this policy.

Workers’ Compensation

Monthly Rate: $70^[12]

Workers' compensation insurance provides financial protection for your business in the event that one of your employees is injured while on the job, regardless of who was at fault. For example, if an employee injured their back while installing a vending machine, workers' compensation can help cover some of the employee's medical expenses and lost wages if they take time off work.

Commercial Crime

Monthly Rate: $54 to $208^[13]

Commercial crime insurance is a type of coverage that can help protect your business from damages caused by employees or third parties. This insurance typically covers losses related to theft, fraud, forgery, burglary and other types of losses of money or physical assets.

For example, if an employee steals money from a vending machine, commercial crime insurance can reimburse you for that loss. Similarly, if a competitor steals property from your business, this type of insurance can also provide coverage.

How Much Does Vending Machine Insurance Cost?

Vending machine insurance can cost $564 per year for a policy that includes general liability insurance and commercial property insurance.^[1][2] Of course, actual rates will vary and will increase if you add other useful coverage options like insurance for mechanical equipment breakdowns and cyber liability. In addition, expect to pay an added $840 per year if you have to purchase workers compensation.^[12]

Other factors that will affect your commercial insurance premium include what you sell. For example, selling food and drink can increase your exposure to health-related liability claims.

Location is another considerable factor because machines located in high-crime areas increase your likelihood of filing a commercial property claim. Finally, a prior claims history full of incidents will usually result in higher premiums.

How Do I Insure My Vending Machine Business?

Here are the steps to buy insurance for a vending machine business:

1. Identify the risks: Since vending machines are particularly vulnerable to theft, vandalism and advertising liability, considering coverage for general liability and commercial property would be a good starting point.
2. Research insurance options: Look for insurance providers that specialize in vending machine business insurance as they are more likely to be familiar with specific risks within the vending machine industry.
3. Obtain quotes: Compare the quotes and select the provider that offers the best coverage at the most affordable price.
4. Purchase insurance: Be sure to read and understand the policy documents to ensure you have the coverage you need.
5. Review your coverage annually: Your business and its risks can change over time so you may need to either increase or expand your coverage. In addition, you should shop around regularly to ensure you’re getting the best price possible.