Promoted as a safer or less harmful alternative to smoking tobacco as well as being more cost-effective for users, vaping nicotine is gaining traction in Canada.

According to Statista, the Canadian e-cigarette market is estimated to reach US$1.4 billion in 2024 and is expected to grow annually by 3.93% through 2028. That’s good news for vape shop owners, as it shows the potential for earning a high-profit margin.

However, there are liability risks for vape store owners. From the threat of property damage caused by fire or water and theft of inventory and merchandise to the risk of cyber-attacks and being liable for the products they sell, business owners need a customized vape store insurance policy to protect their finances.

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What Are the Pros and Cons of Owning a Vape Store?

Like any business, there are pros and cons to owning and running a vape store.

The pros:

  • It can be a lucrative business that appears to be in a growth industry
  • The customer base can be diverse since it attracts smokers looking for an alternative to smoking tobacco
  • You could expand your product line to sell various flavours, other types of merchandise, or cannabis vaping products
  • If you run an online vape store and avoid opening a brick-and-mortar retail location, you’ll have lower operating costs

The cons:

  • Above all, the liability risks. From changing regulations and laws in your province to being responsible for third-party bodily injuries and third-party property damage caused by the products you sell
  • There’s a lot of competition (physical vape stores seem to be almost everywhere), and differentiating your vape shop could prove difficult
  • If you operate only online, there are still challenges differentiating your e-commerce vape store from others and attracting customers
  • Vaping may be perceived as both harmful to health and a youth-related problem (Statistics Canada says about one in 10 Canadians aged 20 to 24 and one in 15 youths aged 15 to 19 vape daily)

What Type of Insurance Does a Vape Store Need?

A comprehensive vape store insurance policy may include the following coverages:

  • General Liability Insurance: General liability insurance covers third-party bodily injury and third-party property damage claims resulting from your business operations. For example, if a customer trips, falls, and is injured on your premises, general liability insurance is designed to pay for their medical expenses.
  • Product Liability Insurance: Vape store business owners are liable for any product they manufacture, distribute, or sell. Therefore, if a vape pen overheats and causes a customer to suffer an injury or it damages their property, product liability insurance is designed to compensate them for those expenses. This coverage may be included in a general liability insurance policy, or you can add it to your coverage if it isn’t.
  • Commercial Property Insurance: If your vape store has a brick-and-mortar retail location, you need commercial property insurance. It covers your property, business contents, and inventory from damages and losses caused by fire, water, a natural disaster, vandalism, or theft. If you lease a commercial space, this type of insurance is still applicable, as it covers any tenant improvements you make to it.
  • Cyber Liability Insurance: Cyber liability insurance covers your expenses if your vape shop falls prey to a cyber-attack or experiences a data breach that exposes your customers’ confidential information. It is vital coverage for any business operating online or using a point-of-sale (POS) system to collect digital payments, especially if your vape shop operates solely online.

Where to Get Low-Cost Vape Store Business Insurance

Protect your vape store with a low-cost, customized vape shop insurance policy from Zensurance and breathe easier. We can take the hassle of getting the insurance your business needs off your hands.

Fill out our online application for a free quote to get started.

Our knowledgeable brokers will find the coverage your business needs from one of over 50 insurance providers in our partner network, tailor it to suit your requirements and budget, and advise you on what coverage limits you need to protect your assets and investment from damages beyond your control.

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About the Author: Mario Petramala

Mario Petramala is a Team Lead, New Business, Medical Malpractice, Zensurance.