Every small business needs insurance. It may feel like just checking a box, but over three-quarters of small business owners report experiencing an event they could have claimed on insurance in the past year.
But how likely will you really need strong insurance coverage for your store?
Imagine a customer accidentally knocks over a display, causing hundreds of dollars in damage to your products and fixtures.
Or a natural disaster strikes, forcing you to close your doors for weeks while you repair the damage.
Tobacco stores and smoke shops often carry flammable equipment and supplies. Even when you take the proper precautions with your inventory, your store has a higher-than-average risk of fire damage. Without proper insurance coverage, these unexpected events can quickly drain your finances and put your business at risk.
This post covers the basics of tobacco store insurance. We’ll discuss common types of business insurance and then discuss five providers you may consider for your insurance needs.
Tobacco Store Insurance: Common Types of Business Insurance
Every business owner needs to protect their business from the risks and liabilities associated with their operations. This is especially true for tobacco and smoke shop owners, who tend to stock more high-risk products, flammable supplies, and otherwise insurance-heavy products.
However, with so many different types of insurance available, it can be challenging to determine which policies are essential for your specific business needs. What are some common types of insurance you might explore for your store? Let’s examine the most common types of insurance and the kinds of risks and liabilities they cover.
Related Read: How To Start a Smoke Shop: Your 10-Step Guide to Success
General Liability Insurance
General liability insurance is a fundamental policy suitable for any business, regardless of industry or size. This type of insurance protects against financial losses arising from a wide range of incidents, including:
- Bodily injury: If a customer or visitor is injured on your store premises, general liability insurance can cover the associated medical expenses and legal costs.
- Property damage: If your business causes damage to someone else's property, this policy can help cover the repair or replacement costs.
- Personal and advertising injury: General liability insurance also protects against claims of libel, slander, and copyright infringement related to your business's advertising practices.
Product Liability Insurance
This type of insurance is a must-have for businesses involved in the manufacturing, wholesale, distribution, or retail of any kind of product. This policy offers protection against financial losses resulting from defective products that cause injury or harm to customers.
Product liability insurance is especially crucial in the tobacco industry, where products are subject to strict regulations and potential health risks. It can help cover legal fees, settlement costs, and damages awarded to plaintiffs in case of a lawsuit related to your tobacco products.
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions (E&O) insurance, is tailored for businesses that offer services to clients.
While this type of insurance may not be as relevant for tobacco stores as it is for service-based businesses like consulting firms or financial advisors, it's still worth considering if you offer any additional services, such as tobacco product recommendations or e-cigarette troubleshooting.
Professional liability insurance can protect your business against malpractice, errors, or negligence claims in providing these services.
Related Read: How Much Is Small Business Insurance? Here's Our Breakdown
Commercial Property Insurance
Commercial property insurance is a wise investment for tobacco stores with significant physical assets, such as inventory, furniture, and equipment. This policy covers losses and damages to your business property caused by a range of events, including:
- Fire and smoke damage
- Storms and natural disasters
- Vandalism and theft
- Civil disturbances and riots
Commercial property insurance can help you recover the costs of repairing or replacing damaged property, minimizing the financial impact of unexpected events that cause damage to your business.
These four types of insurance are the most common varieties of business insurance, but you may want to explore additional policies depending on your needs.
For example, if you have employees, you may be required to carry workers' compensation insurance to cover work-related injuries and illnesses. Commercial auto insurance can protect against accidents and damages if you use vehicles for business purposes.
When selecting insurance policies for your tobacco store, be sure to work with an experienced insurance provider who understands the unique risks and challenges of the industry. By carefully assessing your business's specific needs and choosing the right policies, you can protect your tobacco store from potential liabilities and keep your business afloat no matter what unexpected challenges arise.
With this understanding of the common types of business insurance, let's examine some of the top providers of tobacco store insurance.
1. Allstate
Allstate is a trusted name in the insurance industry, and its comprehensive coverage options make it a popular choice for tobacco store owners.
Cost Range:
The cost of insurance through Allstate depends on factors like your business size, location, and specific coverage options you choose. Annual premiums can range from $1,000 to $3,000 or more, so be sure to request a personalized quote to get an accurate estimate for your store.
Coverage:
Allstate offers coverage that includes protection for your property, liability claims, and business interruption losses, giving you a wide range of coverage. They also offer additional coverage options, like cyber liability insurance, which can help protect your business and customer data from cyber attacks.
With Allstate's network of experienced agents, you can also get personalized assistance in selecting the right coverage options for your business and navigating the claims process if necessary.
2. Nationwide
Nationwide is another major player in the insurance space. This provider offers customizable plans designed explicitly for tobacco shops, making them a strong choice for business owners in this industry.
Cost Range:
The cost of insurance through Nationwide typically starts around $800 to $2,500 annually, depending on factors like coverage limits and your business' specifics. As always, it's best to request a personalized quote to get an accurate estimate for your store.
Coverage:
Nationwide offers customizable insurance plans tailored to tobacco shops' unique needs. Their coverage options include protection for property damage, liability claims, and business interruption losses, giving you a wide range of coverage in one convenient package.
Nationwide also offers a network of agents across the country that can provide personalized assistance with coverage and claims as needed.
3. Hiscox
Hiscox is a specialty insurance provider that offers coverage options specifically designed for retail businesses, including tobacco stores.
Cost Range:
The cost of insurance through Hiscox can vary depending on factors like your coverage levels and the specifics of your business. Annual premiums typically range from $500 to $2,000 or more, so request a personalized quote to get an accurate estimate for your store.
Coverage:
Hiscox offers specialized coverage options for small businesses. Tobacco store owners can find the coverage they need in these customizable plans.
Their coverage options include general liability insurance, property insurance, and cyber liability coverage, giving you a range of protection.
4. The Hartford
Next, you may explore coverage through The Hartford. This popular insurance provider offers solutions specifically designed for small businesses, including tobacco stores.
Cost Range:
The cost of insurance through The Hartford starts from $700 to $2,500 per year, depending on factors like your coverage options and the size of your business. As always, it's best to request a personalized quote to get an accurate estimate for your store.
Coverage:
The Hartford offers various insurance solutions. Their coverage options include property, liability, and business income insurance, giving you a wide range of protection in one convenient package.
The Hartford also offers additional coverage options for specific risks faced by small businesses, allowing you to customize your policy to meet your unique needs.
5. Progressive Commercial
Finally, consider insuring your tobacco store through Progressive Commercial. Progressive Commercial is another big name in the insurance space. With their flexible coverage options and commitment to customer service, Progressive Commercial is a popular choice for many business owners.
Cost Range:
Progressive Commercial’s insurance costs vary based on factors like the size of your business, your location, and the specific coverage options you choose. Annual premiums typically range from $800 to $3,000, but it's always best to request a personalized quote to get an accurate figure for your store.
Coverage:
Progressive Commercial offers insurance solutions, including property insurance, general liability insurance, and business interruption insurance. These options help you maintain income if you’re forced to close your store temporarily due to a covered event.
With Progressive Commercial, you can work with their team of experienced professionals to create a customized policy that meets your business' unique needs. They understand that every retail business is different and will work with you to find the right coverage options for your specific situation.
Beyond Tobacco Store Insurance: Operating Your Store
Using the information in this post, you can explore these five top options for tobacco store insurance and find the right policy for your store. However, you need to remember that business insurance is just one aspect of running a successful business.
To thrive and maximize your profits, you need the right tools and technology at every step in your business process.
A robust point of sale (POS) system is the most critical tool in your arsenal.
A POS tailored to the unique needs of tobacco stores can be a game-changer, offering features like advanced inventory management, scan data reporting, and secure payment processing for high-risk transactions.
Cigars POS offers a system designed specifically for tobacco stores. With our solution, you'll have access to tools that can help you streamline operations, make data-driven decisions, and reduce the likelihood of losses that could lead to insurance claims.
Schedule a demo and see how Cigars POS can transform your business.
