Since bans on indoor smoking have taken effect in most of the country, Americans have been looking for alternatives to tobacco cigarettes. In recent months, electronic cigarettes (also known as e-cigarettes, personal vaporizers, atomizers, and rechargeable cigarettes) have mushroomed in popularity.
These devices allow smokers to get their fix without producing any smoke, which makes them a workable alternative for public places where smoking isn’t allowed. Unsurprisingly, enterprising manufacturers and retailers are scrambling to meet the increasing demand. As with the adoption of any new product, of course, the question arises: what kind of liability insurance do e-cigarette manufacturers and retailers need to protect their businesses?
Here’s an overview of what to look for in your liability insurance policy.
Essential Liability Insurance for E-Cigarette Manufacturers and Retailers
Business owners involved with manufacturing or selling electronic cigarettes should consider the following types of business liability insurance…
- General Liability Insurance (Commercial General Liability): This type of coverage helps protect your business at the most basic level, regardless of what industry you’re in. General Liability Insurance (aka GLI) covers you against a number of types of damage that might happen to third parties (such as customers): personal injury, advertising injury, libel, property damage, and more. For e-cigarette retailers and manufacturers, General Liability covers your business in the event that one of your customers sues for damage or financial loss that occurs on your business premises or because of products you made or sold.
- Property Insurance: This coverage protects your business property, including your storefront or manufacturing facility and your merchandise. In the event that a storm, fire, burglary, or similar event damages that property and causes your business a financial loss, your Property Insurance covers the associated costs.
- Workers’ Compensation Insurance: In most of the country, any business that has employees is required to carry Workers’ Compensation Insurance. This coverage protects your business from the expenses related to workplace injuries and accidents that happen to the people you employ. If, for example, one of your employees falls while stocking shelves and breaks a bone, your Workers’ Comp policy would cover the hospital or medical costs associated with the treatment and recovery.
Do I Need Business Liability Insurance for My E-Cigarette Business?
If you’re selling or producing e-cigarettes, it’s generally a good idea to carry business insurance. Without such protection, you could face tens of thousands of dollars in fines or court costs if and when someone (e.g., a disgruntled client) sues you.
While buying insurance may seem like a luxury, especially if you’re still establishing yourself in the industry, the cost of not covering yourself can be far greater. Think what would happen if one of your suppliers were suddenly unable to provide you with the supplies you depend on? Many General Liability policies include a type of coverage called Business Interruption Insurance that provides you income in just such an event.
If you’re really strapped for cash, ask your insurance agent about how you might be able to save money by purchasing a discounted Business Owner’s Policy.