Unique Insurance Needs of Smoke Shops
Professional Program Insurance Brokerage (PPIB) is another specialty insurance company that offers specialty coverage for smoke shops, vape shops, hookah lounges, and tobacco shops. PPIB understands the unique needs of alternative businesses as they were founded in 1993 to insure the tattoo industry.
“The smoke shop industry has been around for a long time and it's continuing to grow. Some insurance companies may not be keeping up with the changes that are happening in the industry. As a business owner, you want to know your product and the potential for claims and make sure you are protecting yourself and your customers,” says PPIB President Susan Preston.
Some of the coverages offered by these companies include general and product liability, property, theft, glass and signage breakage, loss of business income, Loss of Business Income, and workers comp (in most states). Best of all, you can rest assured that they aren't going to yank your coverage for no good reason.
Smoke shops are obviously going to carry some controversial products, but as long as they are legal, there's no problem. Underwriters agree that it's important for smoke shops to fully disclose the nature of the business and the types of products that are sold including regular tobacco products, electronic cigarettes and e-liquids, and if there is any type of hookah paraphernalia.
Some items, which present a high level of risk, not to mention exposure to the business and insurer, are either not allowed, or may be covered at a higher rate.
“We recognize that smoke shops sell a variety of novelty items,” Preston says, “but we feel that there is a higher risk in selling knives and other potential weaponry. E-liquids also have an unknown potential for future loss.”
One of the most effective ways to decrease liability exposure is to have proper signage throughout the store, warning labels on products where applicable, and to be sure to know, understand and follow all state and local regulations.
It's no secret that smoke shops are targets for theft, so they cannot typically qualify for theft insurance if they do not have a central station burglar alarm. While not required, if your shop is located in a high crime area, it's a smart move to take extra security precautions, such as motion-activated cameras, and bars on the doors and windows.
No matter how well you safeguard your shop, there's always risk. That's why it's important to have the correct insurance to protect your business from unexpected property loss or the unfortunate event of a lawsuit due to some perceived liability.
And that's where a specialty insurance provider can help the most.
“We want to make sure that our clients, no matter the type of policy, are running their business in the best way possible to avoid potential risks and claims,” Preston says. “We look at the whole picture to see that they are operating in a manner that is safe not only for themselves, but also for their customers.”