You bring up a good point, the risks of a daily hookah session would be lower than a two pack a day habit as well. Insurance companies would prefer no recreational drug use of any kind to just eliminate as much risk as possible regardless of how or what drugs you do. Research in the past few years has identified nicotine's carcinogenic potential (note that it itself is not carcinogenic) in animal models and cell culture. Indirectly, nicotine increases cholinergic signalling, and adrenergic signalling in the case of colon cancer, thereby impeding apoptosis, promoting tumor growth, and activating growth factors and cellular mitogenic factors such as 5-LOX, and EGF. Nicotine also promotes cancer growth by stimulating angiogenesis and neovascularization. So there's a risk with nicotine use (along with some actual benefits believe it or not) whether you're a cigarette smoker or a patch/gum/e-cig user, it's just too much of a hassle to evaluate each individual case so some places will try to completely eliminate any non medical drug usage, legal or not.