Vape shops face distinct exposures that make effective risk management essential. Fire hazards, regulatory oversight, theft, and liability risks all have the potential to disrupt operations and cause financial harm. Proactive loss control not only reduces those risks but can also make stores more attractive to insurance providers.
Fire and Property Protection
Lithium-ion batteries, flammable liquids, and electrical equipment create elevated fire risks.
- Install and maintain fire suppression equipment (sprinklers, extinguishers)
- Store batteries and flammable liquids safely and away from heat sources
- Schedule regular inspections of wiring, HVAC, and security systems
- Maintain clear documentation of fire safety compliance.
Improve Physical Security
Because vape products are high-value and easily resold, theft is a primary exposure.
- Install security cameras in key areas, including entrances, exits, and behind the counter.
- Use alarm systems and motion detectors after hours.
- Secure display cases for high-value items.
- Train staff to recognize suspicious behavior and adhere to established security protocols.
Train Employees Thoroughly
Your team plays a vital role in loss prevention.
- Educate staff on proper handling of products and cash.
- Implement clear policies for returns, exchanges, and discounts.
- Encourage accountability by assigning specific responsibilities.
- Conduct regular training on compliance with local laws and age verification procedures.
Regulator Compliance
Non-compliance can lead to fines, legal issues, reputational damage and liability exposure.
- Keep up to date with federal, state, and local regulations regarding vape products.
- Verify customer age rigorously using reliable ID scanning tools.
- Ensure products are accurately labeled and packaging meets legal standards.
- Maintain records of compliance efforts for audits or inspections.
Liability Risk Management
Customers and employee safety should be top priority.
- Keep aisles clear of trip hazards and maintain safe store layouts
- Train employees on proper handling of hazardous products
- Establish and enforce return/exchange policies to reduce disputes
- Review contracts with vendors and landlords for risk transfer opportunities
Insurance as a Risk Management Tool
Even with strong loss control practices, unforeseen events can still occur.
- Review insurance coverage regularly to confirm limits match exposures (fire, theft, liability)
- Consider specialized coverage endorsements such as cyber liability for payment system risks
- Work with an agent who understands the industry’s unique risks and has access to the markets who insure those risks.
Final Thoughts
Loss control is an ongoing process that helps vape retailers operate more safely and profitably while positioning them as better insurance risks.
At Conifer Insurance Services, our Mainstreet Program provides tailored coverage for vape and tobacco shops, backed by an A- (Excellent) rated carrier. With underwriting expertise and dedicated claims support, we partner with retailers to protect their businesses from the risks that matter most.
