Commercial Insurance is an every changing landscape of exposure and companies willing to cover particular exposures. Smoke Shops and Vape Shops, excluding product liability, are basically nothing more than a retail exposure from an insurance standpoint. Coverages are simple but yet it is important to note that without the correct coverages, you are leaving yourself open to exposure to loss that you will not have coverage.
In regards to Property coverage, it is important to make sure you have coverage for the following exposure:
• Inventory and/or Stock
• Business Personal Property
• Real Property
• Business Interruption, including Extra Expense
• Improvements and Betterments
• Glass Coverage
• Theft Coverage
Business Interruption is a coverage that is seldom discussed. This insurance covers the loss due to time, quantity and other values and it might just be the most important coverage of them all. Business Interruption insurance covers the loss of income that a business suffers after a covered loss. Your loss of income will be calculated on an annual basis and coverage will be granted to you based on your time you feel it would take you to get back up and running again after the loss. The Extra Expense portion of this coverage would give you the ability to cover your extra expenses if you had to move to a new location while your loss was being repaired. The reason this coverage is so important is that if your business were to take a several month delay in sales, you would have the ability to stay in business. Many businesses are forced to close their doors for good, if they are not prepared for the down time and revenue loss from an actual loss.
Business Interruption coverage would normally cover the following:
• Profits that would have been earned had a loss not occurred.
• Operating and fixed costs still being incurred by the property.
• Extra expense for moving to, and operating from, a temporary location.
• Reimbursement for reasonable expenses, not including the operating or fixed costs that allow your business to continue to operate while the property is being repaired.
Coverage for business interruption is normally set as to a defined period of time and defines the period of time as starting on the date of the covered peril and the damaged location is physically repaired and returned to operations, under the same conditions that existed prior to the loss.1
When it comes to Property Insurance, the key to surviving a loss may just very well depend on the operation’s loss of income protection.
In regards to General Liability coverage, excluding Product Liability, it is important to make sure you have coverage for the following exposure:
• Claims Made or Occurrence
• Damage to Rented Premises
• Medical Expenses
• Personal and Advertising Injury
• Each Occurrence and General Aggregate
As the Smoke Shop and Vape Shop industry continues to grow, having the right insurance is key to a long term success of your business. SVBS
1Thompson, Gary (2011). “Four Rules for Measuring the Business Interruption Period”
Michael Dauth has been in the insurance industry since 1993 and has many industry backgrounds including underwriting, managing, brokering and program business. Scott Wallach has over 20 years in retail and is a partner in a smoke shop. They have partnered together to create All Smok Insurance which provides shop owners the programs they need and want. Michael can be reached at [email protected] or 832-691-0797. Scott can be reached at [email protected] or by phone at 281-622-8057.