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Insurance for Tobacco Shops: What you need to know

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The tobacco shop industry has been around for over a century and continues to grow. According to the Centers for Disease Control, 34.3 million adults smoked cigarettes in 2017 and a Gallup poll found that nearly one in five adults between the ages of 18 and 29 vape regularly.

With the growing demand for tobacco products, there is an increasing demand for tobacco shops too, but owning a tobacco store is a risky venture. Regardless of the tobacco items you sell, make sure you protect yourself against costly claims by investing in insurance for Tobacco shops.

What risks to tobacco shops face?

Usually, tobacco stores serve as retail establishments where people enjoy chit-chatting over cigarettes, cigars, or vaping products. However, the more time people spend in your shop the more it increases your risk of bodily injury to customers or property damage. Moreover, because tobacco stores carry flammables like butane lighter refills and more, the risk of fire damage is higher.

In addition to the risk of damage or injury on your property, tobacco products are dangerous to the health of the user, so your store could also be at the risk of lawsuits related to smoking-related illnesses. For these reasons, it may be difficult for tobacco shops to find the right insurance. Therefore, when creating a portfolio, hire a knowledgeable insurance agent who can provide you precise answers and help you acquire the right coverage options.

Different Types of Insurance for Tobacco Shops

When running a tobacco shop, your store is at risk of being damaged by fire or theft. Workers, as well as customers, are also at risk of injury. To keep your store safe and to keep those dangers at bay, you need insurance coverage. Here are several policies to consider:

If you allow smoking inside your shop, chances are, you may face the risk of fire damage. If your shop is damaged in an accident, you need property insurance to pay for the cost of these damages.

A single liability lawsuit can cause financial damage to your tobacco shop or even force you to file for bankruptcy. Having Product Liability insurance can protect you not only from this risk, but also provide coverage for financial damages, legal defense fees, and court costs. Product Liability insurance can cover claims associated with flawed marketing, malicious tampering, or product recalls.

This is a popular option for many tobacco shop owners. This policy combines General Liability with Commercial Property, and sometimes Equipment Breakdown coverage as well. A BOP can help you save money by bundling policies together as opposed to purchasing them separately. With a BOP you’ll be covered against claims of property damage or third-party bodily injury.

If you have anyone on your payroll, this policy will most likely be mandatory for your tobacco shop. It covers medical expenses and wage replacement to workers who are injured on the job or become sick as a result of working in your tobacco shop. This insurance protects tobacco products shop owners from expensive lawsuits, ensuring employees who are injured or become disable get payment of their medical bills and loss of wages.

For most retail businesses crime, such as theft, burglary, or vandalism, are common risks and tobacco shops are no exception. Crime insurance protects your business from criminal acts by covering the cost associated with lost merchandise, and property.

Business interruption, sometimes known as Business Income insurance, covers revenue loses a business can suffer in an emergency. This type of insurance is mainly focused on the interruption period caused by theft, or natural disasters and the expected profit loss during that period. Coverage is typically limited to gross income or net profits of your business. The coverage of this insurance has a limited payout time.

Employment Practices Liability insurance covers job-related lawsuits such as breach of contract, employee negligence, harassment, or discrimination-related claims. Be it a tobacco shop or any other commercial settings, these lawsuits are becoming common today. This type of insurance covers retaliation, defamation, negligent evaluation, and negligent supervision.

When running a tobacco shop, there are high risks of fire, theft, and product liability. Workers, as well as customers, are also at risk of injury on your property. The only sure way to protect your smoke shop is with the right insurance.