Wednesday, September 24, 2008

Mike, I am having trouble finding Kiosk Insurance

diane said...
Mike I bought two kiosks. I am having trouble finding insurance for them. I just got a call back from another agency saying unless I had vending experience they didn't want to insure the kiosks for fear of fraud on my part! what??? Who do you use please?
September 24, 2008 11:36 AM
diane said...
Mike I am having trouble getting insurance on my two kiosks. who do you use?
September 24, 2008 11:37 AM
Mike at ReadyDVD said...
My father in law has us set up with a company QBE. They are a national company. In some state, they may go through an agent. They are are a company from Australia. We are set up with a brokerage house in Fargo North Dakota named Concord General Agency. You will have to look them up online. I don't have their number right off hand.
September 24, 2008 11:44 AM
Mike at ReadyDVD said...
Concord General Agency in Fargo North Dakota
720 28th St SFargo, ND 58103
(701) 239-9941
September 24, 2008 7:55 PM


Anonymous said...

Hi Mike, its Diane, thanks. Do you have both liability and insurance on your kiosk and dvds? What do you pay her kiosk? thanks again, you are so nice to help!


Joe Fusco said...

I just signed up with Arizona central


Mike at ReadyDVD said...

We pay roughly $1,034 for General Liability. It's broken down by General Liability at $353 a year and commercial Inland Marine of $681.00 a year.


Mike at ReadyDVD said...

Hi Joe,
Maybe you want to tell Diane how much your are paying and what your policy has on it?

Joe said...

For the year it's $279.00 for $1,000,000.00 liability. I didn't price anything for the kiosk itself yet. The grocery store is requiring liability insurance.

Mike at ReadyDVD said...

Thanks, I forgot to mention that my premium is for 5 machines. I appreciate you letting others know and posting your URL...


VESmontana said...

Hi Diane

I use Allied Insurance for my 2 kiosks, liability and coverage for kiosks and movies for under 4 hundred dollars per year.
I use Central Insurance Agency (Mark Roemer) agent: (406)388-4227
PO Box 1170
Belgrade, MT 59714

Anonymous said...

Hi mike and hoe, its diane. So neither of you had insurance on the machines themselves and the dvds in them?

Another question: if you have a dvd that has 2 discs how do you use the RFID tags on both so that the customer knows he needs to put them both back rather than thinking he can keep one of the two and no one would be the wiser? I didn't think you could use more than one RFID tag per box but hopefully there is a way to make the customer think both DVDs are tagged. thanks so much.

Joe Fusco said...

I was only required by the store to get liability. I'm just starting out and funds are tight so I will insure the machine eventually. My kiosk goes in this Thursday.
As for the rfid tags, I think if more than one is in the case they cancel each other out. I heard you can scratch the chip off one tag and put it on the second disk so they think it's real. I don't think redbox ever has 2 disks in any of thier movies. I have the Hanna Montana movie that came with a 2d and a 3d disk and 3d glasses. As Mike suggested, only put the 2d version in.

Mike at ReadyDVD said...

I don't insure the movies. I think that it would be more money than it's worth. I don't get too many folks that try to steal them anyway. As far as movies in the machine, I only put movies in with 1 RFID tag. I am not sure if you can put two tags in a two movie box. That would be a question for DVDNow. I think it's a waste of an RFID tag (in my opinion). We insure the machines and liability on them. Just set your preauth high enough so you can recapture enough to sell the DVD. I don't have much problems with people taking videos. The ones that do, I take the preauth and ban them from all of my machines in "your pay". The RFID tags will break if someone tries to take them off. The tags that I get from Atlas don't want to come off anyway. Trying to get them off is almost impossible and not worth it to the customers. I've only had a few kids try it and I just charged them $28 for destroying my DVD. They were then banned from ever using the machines again. Kind of stupid on their part.

Mike Weiland

fordguy said...

Chris Wilson/Answered by Michelle Weiland/

I have a couple of quick questions for you when you have the time...

1) Do you use business property insurance? If so, who is your provider and how much to they charge per kiosk?
My father owns an insurance agency. Our insurance premium is right around $1000 a year for 5 kiosks. This is for both commercial liability and property coverage of the kiosks/movies.

2) When dealing with your host locations, how do you figure the % you pay them? I think you mentioned you pay them a percentage of net income, but are most owners OK with this if it takes a little while to turn a profit?

We do pay them 10% of net. Our checks to them aren’t big, but it’s the happy customers that come to the store to rent/return movies that is the “profit” motive to the stores.

3) Are you structured as an LLC or a Corporation?
We are an S Corporation.

4) Do you claim expenses on your persona tax return for home office use or do you charge your company a fee?
No, we don’t meet the criteria for home office as we don’t have a truly designated area/see customers/etc... The company will have to pay us a salary this year. We will do that in the last quarter. We did have a nice section 179 deduction last year, though. We got a nice chunk back on our taxes.

5) For tax purposes (maybe your wife an answer these)

How do you structure your taxes? Are you taxed as a partnership or a corporation, etc??
Since we are an S Corp, the company profit/loss flows to our personal income return. Last year the large startup costs, operating loss, and Section 179 deduction created a nice business loss that reduced our personal income. So we got a large amount of tax $$ back that we had paid in via our normal jobs.

If you and your wife are part of the 2 member LLC, do you have to pay unemployment taxes or do you not have to pay because the both of you are not considered to be employees of the company?
We will have to pay ourselves a salary this year and the resulting taxes. If we don’t, we are a high audit risk. The IRS looks carefully at S Corps and LLC’s that don’t pay salaries to the principals and therefore get out of paying the FICA, etc…

Do you hire the store managers as "contractors" for helping with the DVD's so you don't have to treat them as an employee for tax purposes.
We have one manager that we pay on a per machine basis. We are treating him as a contractor. That is for two machines. The other three are taken care of by the store managers/owners as part of having the kiosk in their stores. Since our kiosks are all away from where we live, we can only manage one of them (that is 15 miles away). The others are 45 – 200 miles away.

I'm just trying to get my head around the tax portion of this type of businss and every little bit helps!



Rich said...

I don't know the name of the insurance company but we get it through our broker Morgan Insurance Group 419 S Division St
Moses Lake, WA 98837
(509) 766-1877

We have liability only on three kiosks (does not cover transportation if moved)at $350 per year.

We only use one RFID tag in a two disc set and leave the second DVD in the case ... amazingly both DVDs are always returned; not one missing in over a year. And 3-D glasses are ussually returned (but not always).

vman92 said...

Great conversation folks. I am still unsure what the best setup for insurance is though. I am a brand new operator and want to cover all of my bases. I understand the need for Liability coverage. Not sure 1M is totally necessary unless a location requests that much. But, I would like to cover the investment that I have made in my 5 250s. On 3/4/10 we will be placing our first machine. And, would very much like to have it covered appropriately. I am thinking something like 250K liability and 30K property. Anything else I might need?

Jeff Vojtko
DVD in a Box, LLC