Tobacco Store Insurance Policy Information
Tobacco Store Insurance. Although fewer people are smoking today than in times past, tobacco stores are still a high-demand market. It is almost impossible to eliminate the tobacco culture. In fact, some retailers have started adding e-cigarettes to their line of products, due to increasing number of people who are switching from traditional tobacco smoking, to vaping. Other retailers deal in rare and expensive types of tobacco.
Tobacco shops sell all types of tobacco items, such as cigars, cigarettes, chewing tobacco, and other smoking devices and supplies, including pipes and pipe tobacco. Most also sell expensive curio and gift items for the smoker. Some sell novelties or snacks.
Whichever the case, if you are dealing with tobacco products, you are dealing with numerous types of exposures, which can only be covered through a tobacco store insurance policy.
Tobacco store insurance protects your smoke shop from lawsuits with rates as low as $77/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked smoke shop insurance questions:
- What Is Tobacco Store Insurance?
- How Much Does Tobacco Store Insurance Cost?
- Why Do Tobacco Shops Need Insurance?
- What Type Of Insurance Do Tobacco Shops Need?
- What Does Tobacco Store Insurance Cover & Pay For?
How Much Does Tobacco Store Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small tobacco stores ranges from $77 to $99 per month based on location, size, payroll, sales and experience.
Why Do Tobacco Shops Need Insurance?
Your tobacco or cigar shop is just like a small retail store. Despite the differences in the customer base, it is a place where people visit frequently and enjoy some social discourse over cigars. Every time clients spend a considerable amount of time in your business, your liability exposure increases, since they are likely to suffer property damage or get hurt while in your premises.
In addition, many tobacco stores contain flammables, such as butane lighter refills. Other tobacco stores allow customers to smoke in their premises. Therefore, the risk of fire damage in a tobacco store is much greater than other retail establishments. Furthermore, most tobacco products are known to pose various health risks on the users and your store could be sued for damages.
Due to the above reasons, most commercial insurance providers don't like insuring tobacco stores. When creating your tobacco store insurance portfolio, you should work with a knowledgeable insurance broker, who will walk you through the whole process, so that you can understand the various coverage options.
What Type Of Insurance Do Tobacco Shops Need?
Typically, tobacco shops need the following types of insurance:
- General Liability - covers third-party claims for injury or property damage caused by the tobacco shop's operations.
- Product Liability - protects the tobacco shop from claims arising from the sale of faulty or harmful tobacco products.
- Workers' Compensation - covers medical expenses and lost wages for employees injured on the job.
- Business Interruption - compensates the tobacco shop for lost income if operations are disrupted by a covered event such as a natural disaster.
- Commercial Umbrella - provides additional liability coverage over and above the limits of the general liability policy.
It's important to note that insurance requirements vary by state and it's always best to consult with a licensed insurance agent to determine the specific coverage needs for your tobacco shop.
Tobacco Shop's Risks & Exposures
Premises liability exposure comes from slips and falls due to public access to the premises. All stock should be on shelves that are easily accessible to customers. Floor coverings should be in good condition, no frayed or worn spots on carpet and no cracks or holes in flooring. Steps and uneven floor surfaces should be prominently marked. Sufficient exits must be provided and be well marked, with backup lighting systems in case of power failure.
Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls. If the business is open after dark, there should be adequate lighting and appropriate security for the area.
Products liability exposure is normally low unless there is direct importing of products. Unfavorable verdicts from tobacco litigation could increase the exposure for individual tobacco sellers.
Workers compensation exposures are due to lifting that can cause back injury, hernias, sprains, and strains, and from slips and falls. Employees should be provided with safety equipment, trained on proper handling techniques, and have conveying devices available to assist with heavy lifting. If smoking is permitted on premises, second hand smoke could result in lung and respiratory injuries to long term employees.
Property exposures are low because ignition sources are limited to electrical wiring and heating and cooling equipment. These should be well maintained and meet current codes for the occupancy. Should a fire occur, substantial fire and water damage may result due to the susceptibility of the stock. Theft is a concern due to the high value of the tobacco items. Appropriate theft controls such as alarms, lighting, and physical barriers to prevent access to the premises after hours should be in place.
Crime exposures are from employee dishonesty and loss of money and securities either from holdup or safe burglary. Background checks should be conducted on all employees handling money. There must be separation of duties between persons handling deposits and disbursements and handling bank reconciliations. Money should be regularly collected from cash drawers and moved away from the collection area, preferably to a safe on premises. Bank drops should be made throughout the day to prevent a buildup of cash on the premises.
Inland marine exposures are from accounts receivable if the store offers credit, computers to transact sales and monitor inventory, and valuable papers and records due to vendor's records. Backup copies of all records, including computer records, should be made and stored off premises.
Commercial auto exposure is generally limited to hired and non-owned liability for employees running errands. If there are any owned vehicles, drivers should have a valid license and acceptable MVR. Any vehicles must have regular maintenance with records kept.
What Does Tobacco Store Insurance Cover & Pay For?
Tobacco stores can face various lawsuits, and insurance can provide protection against these claims. Some of the reasons tobacco stores can be sued include:
Selling tobacco products to minors: Tobacco stores can be sued for selling cigarettes, cigars, or other tobacco products to minors. Insurance can help cover the costs of legal fees, settlements, or damages.
Selling counterfeit tobacco products: Tobacco stores can be sued for selling counterfeit tobacco products. Insurance can provide coverage for legal fees, settlements, or damages associated with such lawsuits.
Selling defective tobacco products: Tobacco stores can be sued if the tobacco products they sell are defective and cause harm to consumers. Insurance can help cover the costs of legal fees, settlements, or damages.
Violating advertising regulations: Tobacco stores can be sued for violating advertising regulations. Insurance can provide coverage for legal fees, settlements, or damages associated with such lawsuits.
Product liability claims: Tobacco stores can be sued for product liability claims if their tobacco products cause harm to consumers. Insurance can help cover the costs of legal fees, settlements, or damages.
Employee injuries or accidents: Tobacco stores can be sued by employees who are injured or have accidents while working. Insurance can provide coverage for workers' compensation claims and related legal fees.
In general, insurance can help protect tobacco stores from the financial impact of lawsuits. Insurance policies for tobacco stores may include general liability coverage, product liability coverage, workers' compensation coverage, and other forms of protection. These policies can help cover legal fees, settlements, and damages associated with various types of lawsuits that a tobacco store may face.
However, the specific details of coverage can vary depending on the insurance company and policy, so it is important for tobacco store owners to carefully review their insurance policies to understand the extent of their coverage.
Commercial Insurance And Business Industry Classification
- SIC CODE: 5993 Tobacco Stores and Stands
- NAICS CODE: 453991 Tobacco Stores
- Suggested Workers Compensation Code(s): 8017 Store - Retail NOC
5993: Tobacco Stores and Stands
Division G: Retail Trade | Major Group 59: Miscellaneous Retail | Industry Group 599: Retail Stores, Not Elsewhere Classified
5993 Tobacco Stores and Standsd: Establishments primarily engaged in the -retail sale of cigarettes, cigars, tobacco, and smokers' supplies.
- Cigar stores and stands-retail
- Tobacco stores-retail
Tobacco Store Insurance - The Bottom Line
Every business has unique insurance needs. Therefore, you should choose a coverages that are right for your tobacco shop. Buying insurance for your tobacco store can be a complex process. Therefore, always work with professionals to ensure you get the most cost-effective tobacco store insurance coverage.
Additional Resources For Retail Insurance
Read valuable small business retail insurance policy information. In a retail business, you need to have the right type of commercial insurance coverage so that your store, employees, and inventory are protected.
- Adult Novelty
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- Appliance & Electronics Store
- Army Navy Surplus Stores
- Art Dealers
- Art Gallery
- Arts & Crafts Supply Stores
- Bicycle Shop
- Boat Dealers
- Book Store
- Bridal Shop
- Candy Confectionery Store
- Carpet Store
- Cell Phone Stores
- Clothing Store
- Collectibles Memorabilia Store
- Consignment Stores
- Convenience Store
- Cosmetics Store
- Costume Stores
- Dry Cleaning
- Embroidery Services
- Equipment Rental
- Fabric Stores
- Fish Markets
- Flea Markets
- Funeral Home
- Furniture Store
- Gift Store
- Greeting Card Stores
- Hardware Store
- Harness & Saddle Shops
- Home Improvement Store
- Infant, Baby & Children's Clothing Stores
- Jewelry Store
- Lamp Stores
- Lingerie Store
- Luggage Store
- Meat Market & Butcher Shop
- Men's Clothing Stores
- Music Store
- Office Supply Store
- Paint & Wallpaper Store
- Pawn Shop
- Pet Store
- Pharmacy Liability
- Plumbing Supplies Fixtures Store
- Poultry Dealers
- Rent To Own Stores
- Scrap Metal Dealers
- Sewing Store
- Shoe Store
- Sporting Goods Store
- Stationary Store
- Thrift Store
- Ticket Agency
- Tire Store
- Tobacco Store
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- Travel Agency
- Trophy Stores
- Tuxedo And Formal Wear Rental Store
- Vending Machine Operators
- Wig Store
- Women's Clothing Stores
- Specialty Retail Stores
The retail industry is a vital sector of the economy, providing goods and services to consumers across the globe. It is also a sector that is constantly evolving, with new technologies and trends emerging on a regular basis.
Despite its importance, the retail industry is not without its risks. Retail businesses face a variety of threats, including theft, damage to property, and liability issues. These risks can have significant financial consequences for retail businesses, which is why commercial insurance is so important.
Insurance can provide retailers with protection against financial loss resulting from unforeseen events. For example, if a retail store is damaged by a natural disaster, insurance can help cover the cost of repairs and help the business get back on its feet. Similarly, if a retail employee is injured on the job, insurance can help cover their medical expenses and any lost wages.
In addition to protecting against financial loss, commercial insurance can also help retail businesses protect their reputation. If a retail business is sued or faces other legal challenges, insurance can provide financial support and legal representation. This can help to protect the business's reputation and maintain customer trust.
Overall, insurance is an essential component of a successful retail business. It helps to safeguard against financial loss and protect against potential legal challenges, which can be especially important for smaller businesses that may not have the resources to absorb these types of losses.
By investing in business insurance, retail businesses can ensure that they are well-equipped to handle the many challenges that come with operating in this dynamic industry.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income and Extra Expense, Equipment Breakdown, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Building, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Computer Fraud, Forgery, Bailees Customers, Goods in Transit, Jewelers Block, Cyber Liability, Employment-related Practices, Business Auto Liability and Physical Damage and Stop Gap Liability.