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Liability?


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Hello everyone! I'm completely new to vending and I was about to go out to find my first location (NY) when a relative brought up a good point.... What liability (if any) do we have by placing these machines in stores? I am vending only gumballs (1 single head machine) so in that case do I need liability insurance for if the machine falls and hits a kid? Or if a kid chokes on a gumball? Does anyone here have any insight into what precautions are necessary when just getting started? I was reading that maybe I need to get liability insurance (a few hundred a year) but that would completely wipe out any profits with this one machine which is making me hesitant about the whole thing now....

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I don't have liability ins. Not suggesting you do or don't get it. Just saying it's a risk I've taken so far. You can get choking hazard labels, and machines don't fall on kids very often. That being said, once you figure out if you like it...And have more than one machine...A couple hundred bucks won't be a big issue.

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7 hours ago, AMD Snacks said:

I don't have liability ins. Not suggesting you do or don't get it. Just saying it's a risk I've taken so far. You can get choking hazard labels, and machines don't fall on kids very often. That being said, once you figure out if you like it...And have more than one machine...A couple hundred bucks won't be a big issue.

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Thanks for the input! I was thinking that would be the logical route to take and that was the initial plan but now I'm a little worried because with my luck something would happen...I have a thirty day window on returning this machine so maybe I'll have to think about it some more. Do the majority of vendors carry liability insurance? 

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i recommend it

its not expensive and it give piece of mind, also can be a selling point if someone was on the fence.

It would cover for the obvious like a kid choking on something or tipping one over on them selves but also if the store or business owner says it caused damage or something. rust on the new flooring tipped over and broke something inside the store. the list are endless and everyone seems to be sue happy today.

its like $30 month, well worth it to me

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21 minutes ago, sweetstop said:

i recommend it

its not expensive and it give piece of mind, also can be a selling point if someone was on the fence.

It would cover for the obvious like a kid choking on something or tipping one over on them selves but also if the store or business owner says it caused damage or something. rust on the new flooring tipped over and broke something inside the store. the list are endless and everyone seems to be sue happy today.

its like $30 month, well worth it to me

I agree completely. If you have any personal assets at all they are at risk without proper insurance. Insurance is a normal expense when running a legitimate business. It's like the old saying goes....."It's better to have it and not need it than to need it and not have it.".

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I just signed up for a policy myself. Long overdue and really not that expensive. $500/year for a $1 million policy. Worth it for the peace of mind alone really. 

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And this is why, if you make the decision to stay with and grow your business, you need to form a corporation also. Sadly we live in a time where even the slightest  perceived incident can result in a law suit. 

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I've got a policy for each of my businesses both 600$ a year for 2 million. Haven't had anything go wrong yet vending. But expect any and everything to go wrong the longer you are in business. Stuff you wouldn't even think of will start coming out of the woodwork.

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1 hour ago, TexasFreemason said:

I don't have insurance, but my business is set up as an LLC, which means I will not lose my personal property to a lawsuit.

Do you have any problems keeping financial things, personal and business, separate?  I know I do.

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1 hour ago, vendtex said:

Do you have any problems keeping financial things, personal and business, separate?  I know I do.

Separation of personal and business financials is a must. Most tax problems arise from mixing the two. 

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8 hours ago, TexasFreemason said:

As an LLC, you can file taxes for it on your personal return.

Yes, net income or loss is reported on your personal return. The net income or loss as calculated and reported on schedule C. 

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Separation of personal and business financials is a must. Most tax problems arise from mixing the two. 


I think it's the liability part that is at risk when mixing the two. Tax maybe but if your a sole proprietorship the IRS treats you like an individual for tax purposes anyone if I'm not mistaken


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Yes that us true. But as I posted elsewhere: what you put on your 1040 is the NET profit or loss as calculated on your schedule C. Just like your shareholders net loss or gain is also put on your 1040. 

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12 hours ago, vendtex said:


I think it's the liability part that is at risk when mixing the two. Tax maybe but if your a sole proprietorship the IRS treats you like an individual for tax purposes anyone if I'm not mistaken


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Yes, but when you're sole proprietor, you have to pay self employment tax. They're are ways to avoid that as a Corp.

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18 minutes ago, rodney69 said:

Yes, but when you're sole proprietor, you have to pay self employment tax. They're are ways to avoid that as a Corp.

If we ever get to the point of actually making money I'll look into that.  

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But after all this discussion: if you have a couple hundred machines a sole propriaship is fine. A lot depends on the state you are in also. And again, this forum is a poor place to get the right answer to tax questions. Such questions are specific to you.

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