Smoke Shop Insurance

Q: What types of insurance do Smoke shops, Tobacco shops, and Vape shops need?

There’s no one coverage fits all when it comes to the risks a business like a smoke shop may face. Compared to the average store, those specializing in smoking and tobacco products tend to deal with more risks to both customers and employees. When smoke shop owners put together their insurance policies, they start with these essential commercial insurance coverages based on the most common risks and hazards.

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Tobacco and smoke shops genuinely come in all shapes and sizes. Some may have a convenience store operation, while others run a prestigious cigar and smoking lounge. Compared to other stores, they also tend to see significant foot traffic.

At the same time, they can’t forget that they can play with fire if they allow smoking on site. Vapes and electronic smoking products are now more commonplace than ever and come with their risks when selling just like traditional cigars and cigarettes.

All this and more raises the question, what does the best smoke shop insurance policy look like? Because of the unique risks, there may be more coverage to consider for a smoke shop.

You may find much insurance to consider for such a business. However, Insurance Navy is here to help you get the most affordable and accessible Smoke shop insurance coverage.

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Why do Smoke shops, Tobacco shops, and Vape shops need to have insurance?

Every business needs to have insurance coverage in some form to operate safely without the fear of a single claim putting them out of service. Damages and injuries can occur to customers, employees, and even products in this line of work.

It often helps to consider the more specific damages and risks in addition to the obvious ones. In the context of running a smoke shop, tobacco and vape sellers have to be aware of the following risks while at work:

Accidental injuries to customers while they are in the shop, like the typical slip and fall injuries, which the shop is liable for
Accidental injuries to employees while they are at work, also like typical slip and fall injuries
A tobacco or vape product that has been recalled caused a customer to get sick.
Regular fire hazard risks if the shop has a smoke lounge with the constant clicking of lighters
Missing or stolen inventory by criminals and employees
Criminal damage like break-ins and vandalism
Forgery, fraud, and employee dishonesty
Products, like lighters that can injure customers
Weather damage like hail and wind can damage the shop building.

These are just some things that a good Tobacco store insurance policy can protect your business from.

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How much does Smoke and Tobacco store insurance cost?

Compared to the average cost of insuring a store location, a smoke shop doesn’t veer far from the average. The only area where they may be putting more money than usual regarding insurance is property damage due to the increased chances of a fire hazard and damage.

For reference, a BOP can cost anywhere from $500 to $2,000 annually for any given business.

Factors influencing the cost of commercial insurance for a store are

The products sold
The number of employees
The location
Any significant prior insurance history

Whether or not the smoke shop has a vape or smoking bar will also play into how much its insurance premiums will be.

What types of insurance do Smoke, Tobacco, and Vape shops need?

No coverage fits all regarding the risks a business like a smoke shop may face. Compared to the average store, those specializing in smoking and tobacco products tend to deal with more risks to both customers and employees.

When smoke shop owners put together their insurance policies, they start with these essential commercial insurance coverages based on the most common risks and hazards.

General liability insurance

Businesses always consider what would happen if a customer were injured while on their property. Medical bills, lawsuits, and lost wages can put any shop out of business if a claim is filed with no insurance covering it.

At the same time, general liability may be required by the state where a business operates. General liability claims can arise if a customer slips and falls into the store and the products it sells.

In a smoke shop setting, the more specific injuries that customers can sustain are a result of the products. They can burn themselves on a lighter or a vape coil while heating up. If the vape or smoking bar and lounges are crowded one day or night, then that only increases the odds of customers injuring themselves.

Of course, any malfunctioning or broken products, like a leaking vape that is sold or injured to a customer, will also be covered as part of the smoke shop liability.

Smoke and tobacco stores don’t have professional liability insurance coverage since they don’t offer services, so general liability will be at the forefront of insuring against customer damages and injuries.

Product liability insurance

Product liability insurance coverage comes into play when a business is sued due to a defect in a product that was sold. In contrast, general liability covers the medical costs and lost income, as previously mentioned.

Since shops are driven by their products, it’s natural that this is one of the foremost insurance for smoke shops. This can be the case if the product differs from what was advertised or was recalled for an issue.

Lawsuits are responsible for several bankrupt businesses and shops. There are several warning labels on smoking products for a reason. As risky products themselves, it helps to ensure that they also receive insurance for the damage they can cause if something is wrong with them.

Workers' compensation insurance

Now comes employees' security and protection with workers' compensation insurance when injured on the job. This is, by far, the most required commercial insurance throughout the United States, and businesses can get in trouble for not providing their workers with coverage.

Managing a storefront and inventory isn’t one of many dangerous jobs worldwide. However, injuries can still happen, and businesses must be prepared to handle them.

That isn’t to say that workers can’t hurt themselves using or demonstrating products to customers. Like general liability insurance, workers' compensation will also cover lost wages and income if injured employees miss work while recovering. Some employees have reported going ill in a tobacco shop after working long hours.

So, workers' compensation isn’t just about insurance but also the well-being of employees, which directly correlates to how successful a business is.

Commercial property insurance

Now comes the matter of protecting the store and all the property within with commercial property insurance. A store’s physical location is prone to damages caused by weather and criminal activity.

Smoke shops and establishments are more than prone to fire hazards and damage in addition to the usual electrical fire risks. It also helps to consider business interruption insurance if such damages cause the store to shut down for some time for repairs and miss out on income.

Smoke shops regularly sell glass pipes of all sizes. If some were to break, be stolen, or be vandalized, commercial property insurance would come to the rescue to cover the replacement costs.

Any other inventory or store asset damage will also become covered if it’s kept on the property. For more high-valued products sold, umbrella insurance may be worth the while.

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Additional Smoke Shop Insurance coverage

While all the business insurance types above will be more than enough to run a smoke shop optimally, there are other coverages that store owners can consider if they wish.

While they are not required like some previous ones, a business owner can find them incredibly useful and even save them down the road.

Inland marine insurance

Since tobacco and smoking products can be fragile, there is always the chance they can break before arrival at the shop.

Inland marine insurance is a form of property coverage covering assets for this exact reason: when they are in transit and even when loaded and unloaded. This is incredibly handy to have if employees regularly handle new shipments of products like water pipes.

Business owner policy

Tobacco and smoke shops aren’t usually corporate or franchise locations; they tend to be locally or privately owned. An affordable way for business owners to get the commercial insurance they need is with a business owner policy or BOP insurance.

This bundles general liability, property insurance, and business interruption into one coverage with reduced premiums.