Insurance for Vape Space Businesses
Let’s face it: you need insurance to protect your vape shop and vape space business. But who are you gonna call?
VapeMentors heartily endorses CALCO Commercial Insurance and their Vape Insurance programs. Why? Because Calco Commercial Insurance is the only insurer broker which specializes in the vape industry and actively lobbies in Washington D.C. in support of vapor products.
CALCO has been insuring vape shops and other businesses since 2008. SFATA, the vaping industry’s trade association, also selected CALCO for their members.
CALCO offers two General Liability policies: one with Product Liability and the other without. Both policies can be packaged to include property coverage for your stock/inventory of e-cigarettes, personal vaporizers and e-liquids. Coverage is offered to importers, distributors, manufacturers, and retailers (vape shops). Other incidental coverages are available as well.
What’s Different About CALCO
Other insurers view and rate e-cigarette and vaping businesses as tobacco companies and apply the exact same exclusions to their insurance policies.
CALCO pools its vaping clients and uses the insurance premium as security, which results in preferred rates and expanded coverage that addresses the needs and exposures of manufacturers, importers, distributors and retailers.
In this rapidly growing industry, it is difficult for business owners to stay current and comply with legal ordinances. CALCO has developed product warning labels and user instructions that are being used by most e-cigarette and e-liquid brands in the U.S. and China. Their intent is to minimize the numbers of injuries and claims in this industry.
Vape Shop Property Coverage
When you sign a lease, most landlords will require you to have a policy with a $1,000,000 per claim and a $2,000,000 aggregate limit. They often request that they be listed as an Additional Insured on your policy. Some landlords may require higher limits and may require that you insure your inventory as well.
To apply for property coverage, simply fill out the below application form and forward the insurance requirement portion of the lease to CALCO ([email protected]). Our agent will review your application and get in touch with you.
Insurance for Vape Products
Unlike tobacco shops that have legal protection from the tobacco companies, vape shops are liable for any product defects in the products they sell.
Most e-cigarette and vape product manufacturers lack the financial resources nor do they have a proper insurance policy to defend you against a lawsuit. While most lawsuits lack merit and evidence, the cost to defend yourself can literally put you out of business unless you have very deep pockets.
To apply for product coverage, simply fill out the below application form and forward it to CALCO ([email protected]). Our agent will review your application and get in touch with you.
Importing Products From China Doesn’t Exempt You
Importing products from China doesn’t exempt you from product liability. When you import products from China — regardless if you put your brand name on these products — you are 100 percent responsible for the quality of these products. CALCO’s advice is to hire qualified professionals and create a quality control plan that includes scrutinizing the batteries and charging cables, e-liquids and labeling for safety and accuracy — anything that could possibly lead to injury, disease or even death. Also keep in mind that most of these products are used by smokers who often have a weakened immune system, increasing their risk of injury.
What If You Don’t Carry the Proper Insurance?
What are the consequence of not having the proper policies? Here are two very real scenarios:
- Once a claim is filed, the initial “discovery period” typically costs at least $10,000 – $20,000 per side. This is the period when the attorneys collect information. This does not cover the cost of the trial, mediation, or expert witness costs.
- If you lose the case, the whole industry loses. Using the wrong attorney and losing your case would be a disaster not just for you, but the entire vaping industry. The case will potentially set a precedent or “case law” that would cripple the defense of future vape space defendants and negatively effect the entire industry.
One Final Note: Be Careful of Your Product Claims
The number one rule for any vape space business is that you must not say that the products you’re selling will help people quit smoking or that they’re a healthier alternative.
Making those statements without scientific data to back it up could result in potential government action against you, a lawsuit from a consumer, or both.