42
TOBACCO BUSINESS
MARCH/APRIL 2014
electric
ALLEY
T
he alleged story, now resulting
in a lawsuit that was heard
’round the TPC 2014 show
floor in January, goes like this: A
Californian couple was traveling by
car to the Los Angeles International
Airport for a volunteer trip to South
America when the woman’s charging
e-cigarette emitted a strange odor. The
woman claims she saw the battery to
the e-cig dripping.
“I went to unscrew it, and the battery
started shooting fire toward me and
then exploded and shot the metal pieces
onto my lap,” she told
CBS News
last
summer. She also reported that her
cotton dress caught fire, resulting in
second-degree burns on her body—and
now continuing trips to a medical burn
center.
A lawsuit is not only pending against
the California-based manufacturer of
the electronic device, but also against
the retailer who sold it. It has been
reported that neither of them had the
proper insurance.
As the e-cig industry continues
to grow and profits continue to
climb, electronic cigarette lawsuits,
including class-action lawsuits, are
wildly spreading across the United
States. Currently, there are lawsuits
for defective batteries, intellectual
properties claims, and for injuries
resulting from electronic cigarettes
blowing up (like the one above),
according to electroniccigarettelawsuits.
com, which also reports that “some
claims have their merits, and some
do not.” It is becoming apparent that
consumers and legal firms are starting
to cash in on the industry for both the
right and wrong reasons.
And that leaves retailers who are
uninsured, underinsured, or who
purchase e-cigs from an uninsured/
underinsured supplier in a very
vulnerable position.
The China Factor
Mike Lewis, chief operating officer
of Vapor Central, a wholesaler in Kent,
Washington that supplies e-cigs and
other vaping products that are covered
by product liability insurance, has heard
a number of retailers complain first-
hand of product safety and lawsuit issues
resulting from e-cigarettes purchased
directly from China.
“This is the only industry I’ve seen
where retailers are purchasing directly
from China, bypassing a wholesaler
to save a nickel,” Lewis tells
Tobacco
Business
. “My biggest frustration with
electronic cigarettes is that everyone is
going after price, but no one is educating
the store owners; they are oblivious to
the overseas product risks and to what
their regular insurance will cover. I have
retailers calling me back after they got
burned buying from China.”
All of the e-cigarettes that Vapor
Central supplies are covered by the
company’s product liability insurance;
retailers that purchase through them (or
any reputable supplier or manufacturer
with the proper product liability
insurance) are reportedly covered
and don’t necessarily need separate
insurance.
But retailers who are buying direct
Rest Insured
Product liability insurance is a must for wholesalers and retailers
who want to get in front of potentially devastating e-cig quality issues—
real and fabricated.
By Renée M. Covino
