Casinos and resorts throughout the country, including in Las Vegas, Los Angeles, and Florida, joined the cigar bar craze years ago, offering clientele the opportunity to light up while sipping exotic cocktails or flights of whisky or bourbon. Cigar bars became the perfect venue for buddies to throw a bachelor party with themed atmospheres that help transport guests to an alternate universe or different era. Hookah lounges in resorts and casinos came next as water-pipe smoking of tobacco became popular, particularly among young adults. Hookah tobacco can be sold in candy and fruit flavors, which appeals to younger audiences.
While cigar bars and hookah lounges offer casinos and resorts the ability to generate additional revenue and offer guests more amenities, they come with real liability exposures of which insureds should be aware. Additionally, tobacco-related exposures are often excluded from Liability policies, including Umbrella insurance.
Burns, Slips & Falls, Product Liability
Some of the liability risks with cigar bars and hookah lounges include burn injuries among guests. In addition, the smoky atmosphere in bars and lounges may contribute to an increase in slip and fall exposures as visibility is diminished. There is a product liability exposure in selling hookah tobacco and cigars. Hookah, in the process of burning the tobacco, releases high concentrations of carbon monoxide fumes, as well as toxic metals and chemicals that have been implicated in causing various forms of cancer. One of the by-products is benzene, which has been shown to play a role in leukemia. Also, carbon monoxide can harm the user’s heart health. Even smoking a hookah just one time can lead to poisoning from carbon monoxide, according to the Centers for Disease Control (CDC). And of course, there are the now-well-known health issues that smoking tobacco products can cause, from lung cancer and emphysema to low-birth-weight infants. A customer could file a lawsuit against the establishment claiming that one of its products caused his or her illness.
Employees & Second-Hand Smoke
Employees working at a cigar bar or hookah lounge could potentially file a Workers’ Compensation claim, alleging that the second-hand smoke from the tobacco resulted in a health issue that is keeping them out of work. Secondhand smoke is associated with a wide range of health problems, including stroke, lung cancer, and heart disease. Although available research is not extensive, one study found that hookah bars have elevated concentrations of indoor air pollutants that appear to cause adverse health effects in employees. Whether Workers’ Compensation would respond to a claim involving second-hand smoke in an establishment depends on state law and the specific situation. If coverage is denied, an employee may file a personal injury lawsuit against his or her employer.
It’s essential that insureds are aware of the various risks involved in having a cigar bar or hookah lounge on their premises. Be sure to review the exposures, including the impact of COVID-19, to best determine how to mitigate their risks.