E-mail Article
Print Article
Whether you are a seasoned operator or new to vending, the vending business carries a certain amount of liability that operators need to protect themselves against. Operators can be properly insured without overspending if they are reasonably informed about what coverages they need.
First and foremost, operators must realize that they cannot depend on personal auto and homeowner's insurance for their business needs. An operator who assumes this is leaving himself open to a major loss.
Operators will need to consult with an insurance professional in determining the amount of coverage they need to cover their business assets.
Personal auto and homeowner's insurance are highly automated insurance products that can be compared fairly easily, are relatively the same in coverage design, and only require a couple dozen answers to get them done.
Business insurance, regrettably, is more complicated. Commercial insurance requires a fairly large amount of underwriting information, and may provide vast variations on what is covered, limited or excluded.
Insurance and risk management
The purpose of insurance is to protect assets, but let's step back from that for a moment. Insurance is a contract under which one undertakes to pay or indemnify another for loss from certain specified contingencies or perils.
On the other hand, risk management is the practice of protecting an organization from financial loss by identifying, analyzing and controlling risk at the lowest possible cost.
Fundamentally, there are only four ways to manage risk: transfer it, assume it, reduce it or eliminate it. It has often been said that you transfer your risk of loss to an insurance company, but that really is not true -- you transfer the known loss, the premium, for an unknown loss and hopefully the financial burden of the loss.
So what coverages do you need to protect yourself and your assets? You can break down the answer into seven types of insurance which equate directly to the type of exposure to loss. Those seven coverages are listed below. We'll address most of them, one at a time.
