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Insurance risks of e-cigarettes

By Jay MacDonald ·
Thursday, July 17, 2014
Posted: 2 pm ET

Numbered ticket in hand, I walked away briefly from the deli counter at my local supermarket to grab a baguette for lunch. As I turned back, I saw a plume of smoke rising over a cold cuts company's display and wondered: What's on fire? As I approached, I smelled something definitely non-deli, an odor somewhere between 1970s-vintage patchouli and a teenage locker room.

Turns out the guy in line behind me was enjoying a vapor-driven e-cigarette. The workers behind the counter and I were gobsmacked.

"Vaping" is here, and if you haven't yet had this experience, rest assured -- you will.

© Diego Cervo/

So it was with some self-interest that I clicked through a new report on emerging insurance risks from reinsurance giant Swiss Re to explore the potential casualty loss risk of e-cigarettes.

It turns out Swiss Re isn't just blowing smoke.

Vomiting and seizures

Here in the U.S., e-cigarettes are booming, with sales last year exceeding $1 billion. Swiss Re waves off the as-yet-unproven health benefits of e-cigs as a way of weaning smokers off tobacco products and gets to the issue that's likely to employ battalions of litigators fairly soon: the e-liquids that become vaporized by the miniature heaters inside the e-cig, a substance Swiss Re describes as "powerful neurotoxins."

"When e-liquids are ingested or absorbed through the skin, they can cause vomiting and seizures and can even be lethal. Toxicologists warn that e-liquids pose a significant risk to public health, particularly to children. They also represent a serious workplace hazard for those preparing and selling them," the report says.

In Swiss Re's estimation, the growing popularity of e-cigarettes poses two major insurance risks:

  • If they turn out to be more harmful to health than recognized today, causing major respiratory and other ill effects, e-cigarettes may trigger the kinds of liability claims against their producers that the tobacco industry experienced in the second half of the 20th century.
  • E-cigarettes might kill you. "Their long-term health effects are not yet known since they have not been on the market long enough," the report says.

The EU cracks down

In February, the European Union reined in e-cigarettes. Beginning in mid-2016:

  • All advertising of e-cigs will be banned in its member nations.
  • All packaging must be childproof and bear a safety warning.
  • The nicotine content of the e-liquid will be capped at 20 milligrams per milliliter.

In April, the U.S. Food and Drug Administration published a proposed rule that, if adopted, would subject e-cigarettes to federal regulation for the first time by bringing them under the agency's tobacco controls.

Postscript: Coincidentally or not, Bloomberg reports that "e-cigs have hit a wall" after U.S. sales fell in May and June following five years of steady growth.

Perhaps there's something in the air.

Most life insurers have already stubbed out e-cigarettes.

Follow me on Twitter: @omnisaurus

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September 06, 2014 at 4:33 pm

A I've always said, it's not about second hand smoke - never has been. If it were, then e-cigs would be acceptable. It's all about control. Government control of citizens. SUCKS!

September 06, 2014 at 9:32 am

I haven't read all of the comments regarding this matter, so I have no idea what is today's grip regarding e-cigs.
1. There is virtually no smell from the vapors that I have been around, so I have no idea what the guy at that meat counter was vaping.
2. YES, WE ALL KNOW THAT NICOTINE IS VERY ADDICTIVE. That does not need to be rewritten as if it were hot off of the press news.
3. I was a smoker for about twenty years. Only out of curiosity did I try an e-cig.
4. I was very surprised and have been using them ever since; about three years.
5. I feel a hell of lot better than I did when I was smoking cigarettes.
6. There hasn't been enough time with e-cigs on the market for any legitimate studies to have been completed to determine how bad vaping "may be."
7. I don't need a study to tell me that vaping is better for me than smoking. When a legitimate one is released, I will be sure to read it.

September 05, 2014 at 9:21 pm

Nicotine is indeed a highly addictive substance, however real cigarettes contain many more poisons compared to e-cigs. For someone who has been addicted for 48 years I feel this is a much better alternative. Sugar for diabetics is also deadly but no one has to show "diabetic free id" to purchase it and products containing it are advertised freely. How about sitting in traffic on the way to work & back 3 hours a day for 30 years and ingesting motor fumes. Can we really eliminate any and all threats to our well being? I agree that cigarettes are very bad and unhealthy and we should inform and educate everyone, especially the young people who can make the choice before it's too late.

Granny Becka
July 22, 2014 at 11:46 am

Nicotine is highly addictive. Does it really matter how nicotine is delivered to a user? Vaporized or burned as a byproduct of processed tobacco, it doesn't matter. The important point is nicotine is highly addictive and ingesting it with a vaporizing device does not make it safer than burning tobacco in cigarettes, cigars, and pipes. Let's not forget that people who use tobacco snuff and chewing tobacco are also exposed to the many dangers of ingesting nicotine. Once again, ingesting nicotine by "any method" is still highly addictive and an unhealthy bad habit.