ATM Insurance—Do You Need It?

ATM insurance is not legally required. However, it is an inexpensive way to protect yourself against expensive accidents and other mishaps. Since your ATM machine is not run or owned by an FDIC-insured institution, you are not subject to FDIC protection. While you can get ATM business-specific insurance, you don’t have to. A general liability policy might be enough, depending on your needs. 

Most location owners will expect you to have this coverage at the very least before they agree to work with you. So, getting a policy ahead of time will help you navigate this potential objection to a location agreement.

In this article, we’ll cover different types of insurance so that you know what you’re looking for!

ATM Business Insurance—Specialty Insurance

ATM business insurance is also known as specialty insurance. It is designed to protect you against loss of your ATM machine and the cash inside. However, not every policy will cover all scenarios. It’s important to decide which events you want covered and for how many machines. That way, you know exactly what is covered by your policy and what isn’t. 

There are some basic events that ATM insurance policies could cover. Your policy could include the following coverage types:

Commercial General Liability

All businesses face risks. An ATM business is no different. Business insurance, then, is designed to protect your assets. The most common and most crucial policy business owners purchase is commercial general liability. 

General liability insurance covers bodily injury, property damage, medical payments, and legal defense. For example, if you accidentally damage the location owner’s property while moving or installing your machine, insurance would cover the cost of repairs. Or, on the rare occasion a customer gets injured while using your machine, insurance would cover the cost of treating the injuries. And if a disgruntled customer takes legal action against you or your company, insurance could cover the costs of defending yourself.

You can expect to spend about $400-$700 a year for $1 million in general liability coverage. But general liability insurance won’t cover your machine or the cash inside. So if you want more than general liability coverage, you will need to look for a more specialized insurance policy.

Commercial Property Insurance

Commercial property insurance covers your ATM business’s physical property and any business-related contents if they are damaged by an insured peril. This might include fire, theft, water damage, vandalism, etc.

Commercial property insurance covers any tools you use to maintain your ATM machine. This coverage also applies to any facility where you store your ATM machine(s). In the event of a fire, for example, your tools, machine(s), and other affected property would be covered.

Equipment Breakdown Insurance

Equipment breakdown insurance can protect your equipment against internal or mechanical failures. This means that if one of your ATMs breaks down due to an insured loss, your insurer might cover the cost of repairs or replacement.

Crime Insurance

Crime insurance coverage can help mitigate the financial losses due to burglary and robbery, whether by an unknown perpetrator or by someone who works for you. Either way, crime coverage protects you against theft of the machine and/or the cash inside.

Crime insurance could protect you in the event of the following situations:

Employee Dishonesty: If you hire someone to vault your machine or perform any kind of service or maintenance, and that employee steals from your machine, crime coverage would protect you.

Robbery: If someone steals cash from you or an employee while, say, vaulting the machine, your loss would be covered.

Burglary: Burglary refers to theft of cash from the ATM machine itself.

Property: This applies to damage to or loss of the ATM machine (also referred to as mysterious disappearance).

Liability: Similar to a general liability policy, liability coverage safeguards you against the costs of legal defense, bodily injury, and property damage resulting from the operation of your machine.

Business Interruption Insurance 

Business interruption insurance can protect your ATM business from lost income if it is forced to close due to an insured peril. These may include theft, fire, vandalism, water damage, etc.

When inquiring about events that are covered, request details about property damage, theft, liability, and business interruption. The extent of coverage may vary depending on the specific event and risks involved.

Commercial Auto Insurance

You can get commercial auto insurance to cover your or your employees’ vehicles while on the road to and from your ATM locations. Any vehicle that you use for business purposes can be covered under commercial auto insurance.

Workers’ Compensation

If you hire employees to help you operate your ATM business, you might be required by law to carry workers’ compensation insurance. It depends on your state. Workers’ compensation helps you pay for any medical bills employees incur while on the job. If an employee gets injured while servicing or operating your ATM machine, this insurance prevents you from having to pay out of pocket.

Cash In Transit

Some specialty insurance providers will offer coverage for cash in transit. But if you hire an armored car service, these companies often carry their own insurance. This coverage is typically reserved for companies that need to insure fleets of armored vehicles. However, you can ask about contingency coverage that kicks in if the other company’s insurance fails to pay.

Jackpotting

Another threat, although rare, is “jackpotting”. Jackpotting happens when a hacker creates a malfunction, causing an ATM to dispense all of its cash. Typically logged as a valid transaction, this could create a loophole for insurance companies to not recognize it as a theft claim and deny coverage. 

If you are concerned about this, inquire with each company to see if this and other events would qualify when looking for coverage. Previous jackpotting loopholes have been fixed by the processors, but if some new technology arises in the future that may concern you, then look into this.

ATM Specialty Insurance Providers

It’s important to verify with each ATM insurance provider you inquire with the coverage they offer, specifically relating to ATMs. When purchasing ATM insurance, make sure your policy limits cover loss for each machine you own, whether that be one or 50.

Here is an overview of what some specialty insurance providers offer:

Marshall+Sterling has over 50 years of experience in the money handling industry and offers specialized programs for ATM businesses, including crime, property, and liability coverage. However, they don’t offer event insurance or coverage for just one ATM. Contact them for specific needs, as their requirements and rates change.

American Special Risk (ASR) has nearly two decades of experience providing insurance solutions tailored to the needs of the ATM and vault cash industries. They offer coverage for property, crime, and liability exposures specific to ATM operations, including protection against physical attacks, natural catastrophes, and lawsuits arising from ATM use.

Other Possible ATM Insurance Providers

Eventsured is a provider recommended for high-risk events potentially suitable for those affecting ATMs.

Thimble offers special event insurance and provides quick online quotes.

Several venues highly recommend RVNA. They are potentially suitable for machines needing ATM coverage at events.

The Hartford is a well-established company that provides special event insurance suitable for various events, including those affecting ATMs.

Travelers offers event coverage that might apply to events affecting ATMs.

American Team Managers Insurance Services primarily focuses on wholesale insurance for independent agents. They offer tailored solutions and exclusive programs, which can include ATM-related coverage in some states. You can inquire about their offerings for your specific needs.

Many general business insurers may offer coverage that can be tailored to include ATM-related risks as part of a broader business insurance policy. 

Not every policy will cover all scenarios. So you will want to be clear about the specifics of your policy to make sure you know exactly what is covered and what isn’t. Consider contacting reputable insurers to discuss your specific needs and see if a provider can create a customized solution. 

Just like any other type of insurance policy you might have, you purchase enough to cover each machine you own. Your premium is based on how much coverage you need. You can sometimes add on whatever risks aren’t covered under the main policy. So you just have to decide what risks you specifically want to mitigate and see if your insurance company offers coverage for those scenarios. 

More Ways to Mitigate Risk

In addition to purchasing insurance, to help set your mind at ease, there are some other security tips you can implement to mitigate risk. First and foremost, you want to place your ATM machine strategically.

Make sure the machine is well-lit and within eyesight of on-site employees. Try to keep the machine away from glass doors or windows that are easy to breach. Bolt the machine down to prevent its removal and limit access to the case. 

Ensure the machine is within the range of nearby security cameras or consider purchasing your own. Cameras not only deter vandalism and theft, but they can also help catch criminals. Some insurance companies will require you to have the machine bolted down and have cameras and possibly an alarm system if the location is not open 24/7 as a condition of coverage.

There are also business practices you can implement to mitigate specific risks. For example, use remote online monitoring to check on your machine when you’re off-site. Only provide keys to people you trust. Regularly update software to prevent logical attacks (attacks that involve breaching software and hardware). And consider keeping an irregular vaulting schedule to avoid robbery.

You don’t necessarily need to set up an LLC or corporation for your business, but you will need a business bank account, so a sole proprietor is the minimum; however, an LLC is recommended so you benefit from having protection for your personal assets. If you go this route, you can look into LLC insurance. Staying up-to-date with business licensing can also be beneficial.

Finally, add any necessary clauses to your contracts and other documents. This can help you establish what risks you will assume and which you want the location owner to accept. 

Conclusion

So, do you need insurance for your ATM business? Not legally. But it is definitely a good idea to purchase general liability insurance. Many location owners may want you to be covered before they enter into a partnership with you, so it’s best to be prepared with quotes so you can budget as needed.

If you decide you’d like alternative or additional coverage, you can shop around and speak to an agent about the best policy for your needs. Your specific needs might depend on how many machines you have to insure, how many people (if any) you employ, and where your machine(s) are located.

In the end, you know what’s best for your business. But if you’d like to speak to someone with years of industry experience about which scenarios are more common than others, contact us today!