Vape Shop Business Insurance
Getting insurance for your vape shop is essential; this is because vape shop owners need to protect themselves against a variety of different risks, such as product liability claims, trademark disputes, and property damage allegations.
You will also want to ensure that you comply with all relative FDA warnings in order to avoid fines and potential lawsuits.
We’ll help you find the most personalized and affordable coverage for your unique business.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for a Vape Shop Business
General liability insurance is — generally speaking — one of the most important insurance policies for vape shops.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
Even so, you may benefit from purchasing additional insurance policies. This is because a general liability coverage policy will not always be enough to “fully” cover your business from all angles.
Depending on your unique needs, it may be a good idea to consider purchasing the following coverage policies:
- Product liability: Protects you from claims that arise as a result of product-related injuries.
- Workers’ compensation: Protects you from employee-related disputes and claims.
- Commercial property: Covers the cost of replacing damaged or stolen vape shop inventory.
- Business income: Covers part of your lost income in the event that you are required to shut down temporarily.
When purchasing your coverage, you will need to decide what type of insurer you will use; there are two options available:
- Traditional brick-and-mortar insurers — Examples include Nationwide, Hiscox, and The Hartford.
- Online insurers — Examples include Next Insurance and Tivly.
As a small or new business owner, we recommend going with an online insurer due to the fact that online insurers can be significantly more affordable due to the lower operating costs involved.
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Cost of General Liability Insurance
The average vape shop in America spends between $400-$700 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for a vape shop business to other professional industries using the graph below.
Several factors will determine the price of your policy. These include your:
- Location
- Deductible
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.
A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
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Common Situations That General Liability Insurance May Cover for a Vape Shop Business
Example 1: In an effort to reach a product in your store, a customer presses down on a glass display case and shatters it. He sustains deep lacerations that require medical attention. When he demands that you pay for the medical care costs, you can contact your insurer to get the bills covered by your general liability insurance policy.
Example 2: While marketing your company, you put out an advertisement claiming that your vape shop has superior e-cig supplies than the competitors in your area. One of these competitors decides that you have damaged the reputation of his business and takes legal action. Your general liability insurance policy will cover the cost of your legal fees, including the cost of your legal defense and the cost of any settlement.
Example 3: The parent of a customer has determined that your store is responsible for the excessive e-cig use of his son and files a lawsuit against your business. Your legal fees are covered by your general liability insurance, so you don’t have to pay for an attorney to defend your business.
Other Types of Coverage Vape Shop Businesses Need
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:
Commercial Property Insurance
With all of the e-cig juice and vaping equipment you carry in your shop, it is important that you carry commercial property insurance. The commercial property insurance policy you purchase will ensure that you can get financial assistance should you sustain a significant loss of inventory in an event like a fire or storm. That way, you can get more inventory as quickly as possible and get back to selling your products.
Product Liability Insurance
You sell a wide variety of products. If one of your customers sustains an injury that he or she blames on your products—like a vape pen or a certain type of e-cig liquid—that customer may sue your shop. Your legal defense costs would be covered by your product liability insurance policy. Should you need to settle out of court, your policy would cover those costs as well.
Workers’ Compensation Insurance
If you have employees in your vape shop, you need workers’ compensation insurance to protect them in the event of a work-related injury. Workers’ comp pays for medical treatment for work-related injuries and work-related illnesses, as well as lost wages, should the employee be unable to work for a period of time. Most states mandate that employers carry workers’ comp coverage, although the exact details of when the insurance is required and what coverage limits are required vary by state.
Commercial Umbrella Insurance
A commercial umbrella policy is designed to pick up extra expenses when the limits of your general liability insurance policy are reached. There are certain situations where this can occur, such as if your business loses a big lawsuit. Instead of needing to pay the extra costs from your own funds, you can rely on the commercial umbrella insurance coverage to take care of them.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.
Here are several things you can do to better protect your vape shop business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Maintain your corporate veil.
Vape Shop Business Insurance FAQ
Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.
A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
Yes, you do. This is because you will want to purchase your coverage before you begin interacting with customers in order to avoid having to face a dispute without being covered.
Similarly, you should purchase your workers’ compensation insurance policy before you begin hiring staff members.
Not necessarily. Certain exceptions may be written directly into your vape shop business insurance policy, and some perils may be entirely uninsurable.
Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.
An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.