Electronic cigarettes are widely believed to be a safer smoking alternative to tobacco, but the associated health risks are still not fully understood. Future liability dangers mean insurers are maintaining a cautious approach in the growing “vaping” industry.
Scientific studies have this year stated that e-cigarettes are comparatively “healthy” when compared to their toxic predecessors, but question marks still hang over the “vaping” products – including whether or not they can contribute to heart disease, lung disease, and whether they could be a gateway to traditional tobacco products.
The medical community does not yet have enough data to prove e-cigarettes don’t cause harm, and that’s why insurers are shy about jumping all in to the industry, says Markus Kälin, head of casualty risk engineering at
XL Catlin.
“Some insurance agencies will provide coverage; some will add an exclusion, saying we don’t want to go into the same situation we had with tobacco,” he explained. “You will see probably various different approaches, going forward.
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“It’s a very selective approach. Therefore I think we would try to handle this with companies we think have a more scientific approach and that are also willing to disclose what they have in their liquids [the vapour they sell].”
Harvard research in late 2015 found Diacetyl – “a flavoring chemical linked to cases of severe respiratory disease” – was found in more than 75% of flavored e-cigarette liquids tested, although new regulations make ingredient disclosure compulsory. And this year, academic journal
Tobacco Control published research claiming e-cigarettes serve as a gateway device for teenagers who moved on to smoking real cigarettes.
So the dangers remain for insurers: if e-cigarettes turn out to not be the healthy product they are advertised as, then lawsuits could follow.
“For us, this is still a true emerging risk, where we still don’t know what happens when you inhale a chemical substance and you don’t know exactly what it does,” Kälin said.
Insurers would be reluctant to sell occurrence policies to e-cigarette companies now, he said.
“We would not insure e-cigarettes with an occurrence policy today,” he noted, “because there is an emerging risk, and that’s not covered anymore with occurrence policy; we always use claims made. This reduces the … risk for the insurance company.”
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