You don't want to insulate over the condenser. If the sides feel warm after the compresser has ran for a while, that's where the condenser is. My mini-fridge is constructed this way and it looks like yours is too.
Nothing on a fridge should be hot enough be a fire hazard. Unless you insulate over the condenser, but the compressor should shut down or be destroyed before this happens.
What about insulating inside the fridge?
Maybe expanded polystyrene would be a good choice?
All About Insulation
I'm not convinced whether laying down a fridge really helps because I haven't seen any test results. Obviously if you open the door a lot it will make a difference.