By Timothy S. Donahue

Top Takeaways:

• Coverage denied: Century Surety does not have to indemnify an Alabama smoke shop sued by a customer who says a vape pen battery caught fire.
• Location matters: A federal judge found the alleged accident happened away from the retail locations covered by the policy.
• Separate fight: The ruling decides the insurance dispute, not whether the retailer is responsible for the customer’s alleged injuries.

The battery allegedly caught fire and the vape shop’s insurance went up in smoke.

An Alabama federal judge has ruled that Century Surety Co. need not defend or indemnify a smoke shop being sued by a customer who alleges that a vape pen battery caught fire in his pocket and burned him.

U.S. District Judge Terry F. Moorer ruled that the alleged incident did not occur at any of the retailer’s locations covered by the Century policy.

The insurance dispute stems from an underlying lawsuit filed by Stephen Lawrence Wright against Montaser Shahrouj and Maya Wholesale Inc. Wright alleges he was burned when a vape pen battery in his pocket caught fire.

Century filed its federal declaratory judgment action in April 2025, asking the U.S. District Court for the Southern District of Alabama to determine whether it was obligated to defend or indemnify its insureds in connection with Wright’s claims.

The insurer said it wasn’t.

The dispute centered on the location of the alleged accident. Century maintained that its policy limited coverage to bodily injury occurring at designated premises, while Wright’s alleged battery fire occurred away from the insured retail locations.

Moorer agreed with Century, concluding that the off-premises incident did not trigger coverage under the policy. The result leaves Century without a duty to defend the underlying lawsuit or to indemnify the insured defendants for Wright’s claim.

However, it does not decide the underlying product-liability dispute.

Moorer’s ruling does not determine whether the vape battery was defective or whether Shahrouj or Maya Wholesale is legally liable for Wright’s injuries. Those issues remain separate from the insurance coverage question the federal court decided.

Century filed the coverage action on April 25, 2025. Its amended federal complaint included Wright’s state-court complaint and the Century insurance policy as exhibits. Maya Wholesale was later added to the federal case.

The case is Century Surety Company v. Shahrouj et al., No. 1:25-cv-00178, in the U.S. District Court for the Southern District of Alabama.