Vending machine liability: who pays when a machine injures someone?

Who is liable when a vending machine injures someone?

Liability for a vending machine injury generally falls on whoever controlled the cause. A business owes the customers it invites in reasonable care to keep the premises safe and to warn of known dangers that are not obvious, as Cornell’s Wex legal dictionary summarizes the duty. The company that owns, stocks and services the machine answers for the machine itself, and a single claim can name both.

A federal appeals case shows how that plays out. In Fischer v. Red Lion Inns (8th Cir. 1992), a hotel guest in wet swimming trunks was shocked by a soft drink machine whose damaged power cord had exposed wires touching the metal cabinet. He sued the hotel and the bottler that owned, maintained and stocked the machine, the same arrangement as a Coke or Pepsi machine placed by a bottler today, and the court upheld the jury’s verdict against the bottler, holding that as the machine’s supplier it had a duty to inspect it. The jury had been told the hotel owed its guests reasonable care to keep the premises safe but “is not an insurer of the safety of its registered guests.”

The testimony in that case is a warning for hosts. The bottler’s service foreman said he saw damaged power cords on its machines about nine or 10 times a year, and that its service department received complaints of machines causing shocks about once or twice a month. A frayed cord behind a cabinet sits on your floor, whoever owns it. Hotels can weigh that exposure against a micro market or staffed pantry in hotel vending options.

How often do vending machines tip over or shock people?

Vending machine tip-overs and electrocutions are rare but can kill, and the federal record covers both. In 1989 the U.S. Consumer Product Safety Commission announced a retrofit of about 115,000 Vendo soft drink machines after reports of “an increasing number of deaths and injuries” from tip-overs, most of them, CPSC said, believed to involve people rocking or tilting machines for free product or their money back. The retrofit added devices that stop a tipped or rocked machine from dispensing free product, a fix aimed at the motive.

Army doctors documented the same pattern. A 1988 report in JAMA described 15 young men, aged 15 to 24, hurt after rocking soda machines; three died and the other 12 were hospitalized (PubMed). A 1992 follow-up analyzed 64 crush cases with 15 deaths and an average victim age of 19.8, and credited public awareness and action by government and industry with a sharp drop in accidents (PubMed).

Electric shock is the other hazard. In a 2002 draft proposal for the National Electrical Code, CPSC staff reported three electrocutions involving vending machines since 1995: two children, aged 9 and 10, who touched machines, and a service worker. In each case a current-carrying conductor faulted to the machine’s exposed frame and the ground path was damaged or inadequate (CPSC meeting log and proposal). Staff proposed ground-fault protection for cord-connected machines; vending machine electrical requirements covers what the code asks for today.

Manufacturers still warn about both. Royal Vendors’ manual for its glass-front vender says a support leg under the door hinge must be extended to the floor or the machine can tip forward, with results as serious as broken bones or death, and that the machine must plug into a grounded outlet (Royal Vendors). Some hosts write the fix into policy: Bemidji State University requires campus machines to be fastened to a wall, floor or structure, or otherwise secured so they cannot be rocked or tipped.

What other risks does a vending machine bring onto your premises?

Beyond tip-overs and shocks, a vending machine brings product, slip-and-trip, fire and access risks onto your premises. Most trace back to the machine and its stock, which the vending company controls, but some trace back to the outlet, the floor and the spot you chose, which you control, and your paperwork should mirror that split.

Product risk is not limited to food. In 2004 the CPSC announced the recall of about 150 million pieces of toy jewelry sold for 25 to 75 cents through vending machines in malls and in discount, department and grocery stores, because some pieces contained dangerous levels of lead.

Extension cords are a workplace rule as well as a fire risk: OSHA bars flexible cords from use as a substitute for a building’s fixed wiring (29 CFR 1910.305), and Royal’s manual rules them out unless a certified electrician approves one. OSHA also keeps equipment out of exit routes (29 CFR 1910.37), and a machine that blocks an accessible route invites a different kind of claim, covered in vending machine ADA requirements.

What insurance should a vending company carry for your business?

A vending company placing a free vending machine in your business should carry commercial general liability insurance, which pays for bodily injury and property damage it causes to others, with coverage for the products it sells. Limits of $1 million per occurrence and $2 million aggregate are a common floor: Insureon says 91% of its small-business customers choose them.

Operators’ own guidance lands on the same limits. PinPoint Vending’s rundown of vending insurance calls $1 million per occurrence and $2 million aggregate the standard venues demand, reports a median premium of about $37 a month, or $442 a year, for $1 million of cover, and says a certificate of insurance is required before delivery at most venues, with an additional insured endorsement commonly requested because the venue’s own lease obliges it. A company that treats either as unusual is not used to commercial venues.

Ask three more questions. Does the policy cover the products the machine sells? Does the company carry workers’ compensation for the people who service your machine, where your state requires it? When does the policy renew, so a fresh certificate reaches you before the old one expires?

Tell your own insurance agent about the machine as well; your general liability policy covers your premises, and the agent can explain how it responds to a claim involving someone else’s equipment. The pillar guide, how to choose a vending company, scores insurance alongside four other checks.

Is a certificate of insurance enough to protect your business?

A certificate of insurance on its own does not protect your business; it only shows that the vending company bought coverage. IRMI, the insurance reference publisher, defines the certificate as evidence that coverage and limits were purchased, and an additional insured as a person or organization added to someone else’s policy at the policyholder’s request.

The difference shows up when a claim arrives. As a certificate holder you have a document; as an additional insured, your business is an insured under the vending company’s policy for claims arising from the machine, within the endorsement’s terms. IRMI notes that additional insured status is often paired with an indemnity agreement as a backstop in case the indemnity proves unenforceable.

Ask for the endorsement page itself, with your business’s legal name on it, and check that the policy dates and limits match what the agreement promises.

The City of Madison, Wisconsin, asks licensed street vendors for at least $1,000,000 per occurrence, the “ADDL INSD box checked,” the words “The City of Madison is listed as an additional insured” in the description of operations, active policy dates and an insured name that matches the license exactly. Those are street-vending rules, but they make a good model: the same checks fit a vending company’s certificate, with your business’s name in place of the city’s.

What should the indemnity clause in a vending agreement say?

The indemnity clause in a vending agreement should commit the vending company to defend you against, and pay for, claims arising from its machine, its installation, its servicing and the products it sells. IRMI describes three forms of hold harmless agreement, limited, intermediate and broad, and notes that the broad form is unenforceable in a number of states.

In the limited form, the vending company covers only claims caused by its sole negligence. The intermediate form adds claims where both of you share fault. The broad form also covers claims caused by your own sole negligence.

Our view: ask for the intermediate form. It reaches the shared-fault claims a limited clause leaves out, without asking the vending company to insure your own negligence, which a broad clause may fail to do anyway.

In IRMI’s definition, primary and noncontributory means the operator’s policy “must pay before other applicable policies (primary) and without seeking contribution from other policies that also claim to be primary (noncontributory).”

Have a lawyer adapt the wording to your state. The rest of the contract is covered in vending service agreement clauses.

What should you check before a vending machine is installed?

Before a vending machine is installed, check the paperwork first and the machine second: the certificate, the endorsement and the indemnity clause, then how the cabinet stands, how it is plugged in and where it sits. Each check takes minutes on install day and is much harder to arrange once the machine is loaded, plugged in and selling.

What should you do if someone is hurt at a vending machine?

If someone is hurt at a vending machine, get them help first, then keep the scene as it was: keep people away, unplug the machine only if that is safe, and photograph the machine, its cord, the outlet and the floor. Write down names, times and what witnesses saw on the same day, while memories and the scene are fresh.

Notify the vending company and your own insurer in writing that day and keep copies of what you send. Unless the machine is a hazard, do not let anyone repair or remove it until both have had a chance to inspect it, and talk to a lawyer before you sign anything about the incident.