How General Liability Goes Up in Smoke

Databases containing billions of detailed files on insurance and risk management is part of the complex web of information that companies such as the Insurance Services Office (ISO) draw upon to create a broad platform on which its information services, including general liability rating, is based. A growing and controversial trend and recent stories in the news about its associated problems will no doubt add to the collection of data that informs decisions on risks and how much to charge customers who take those risks.

The rise of the e-cigarette

Electronic, or e-cigarettes, are battery-operated tubular-shaped devices with a bright blue or red light shining at the tip, through which users inhale a vaporized nicotine substance (sometimes referred to as “juice”). A sensor inside the e-cigarette activates when the user inhales, sending a message to a tiny microprocessor in the device that heats and vaporizes the juice (which can be purchased in various “flavors” with some containing nicotine and others not), enabling the smoker to breathe in the vapor. The vapor (rather than smoke in a traditional cigarette) is then exhaled. The action of inhaling and exhaling provides the smoker with the feeling and taste of traditional smoking.

These devices are relatively new on the scene, so their true ability to cause damage and liability is not yet entirely realized. However, serious concerns abound about these devices and the advisability of their use, including:

  • It is unknown whether e-cigarettes provide greater fire safety than traditional ones–and considering that tossed, unattended, or forgotten cigarettes are one of the biggest causes of forest fires and more than 1,000 deaths in the home due to fire each year, a new device on the market that mimics cigarettes simply adds to the problem.
  • E-cigarettes have been known to have their own particular problems. They are powered by batteries and can break, overheat, or even explode.
  • The nicotine juice in these devices is concentrated so if ingested can cause children to become extremely ill and can even result in pet fatalities. In fact, the number of animal fatalities due to nicotine overdose has increased dramatically as use of the devices, also called vaping, has grown.
  • Anti-smoking and children’s protection groups are up in arms about the devices, contending that they and the associated juice are being designed in colors and flavors attractive to children and teens.

Redefining general liability rating in a world that includes e-cigarettes will no doubt be a process that is ongoing and reflective of the additional risks that will make themselves known as the popularity of these devices continues to increase.

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