When insuring a jeweler, a Business Owners Policy (BOP) is often secured to provide liability and property insurance. The property component in a BOP provides coverage for property damage and theft to business personal property, but it provides very limited coverage for jewelry inventory—or none at all.
Often a retailer doesn’t realize there is little to no coverage for a loss to its jewelry inventory until there is a claim. Additionally, many insurance agents who don’t specialize in this area also mistakenly believe a BOP or property policy will cover damage or theft to their clients’ inventory.
The Many Facets of Proper Protection
A Jewelers Block policy is needed to properly protect a retailer’s inventory, stock on memo or consignment, goods in process and raw materials, and customers' property entrusted to the retailer from physical loss or damage. The policy insures precious and semi-precious stones, jewelry, precious metals and more.
RPS offers coverage to individual stores and franchises, jewelry and watch repair stores, shops with high-value jewelry, and even refineries that break down gold and silver. Coverage is provided on an agreed-value or replacement cost basis and is worldwide.
“With our Jewelers Block policy, you can insure inventory on and off premises including stock that the retailer receives on memo or consignment from another store,” explains Kathy Gallagher-Burton, RPS Broker/Underwriter. “For example, let’s say a jeweler has a customer looking for a three-carat diamond of a specific quality and requests another store to send the diamond to show the client. The diamond will be covered for damage and theft while in the insured’s custody.”
Inventory in transit is also covered under the policy, but Gallagher-Burton notes there are applicable shipping requirements that the insured must follow when sending and receiving inventory to mitigate the potential for loss and for coverage to apply. The inventory must be taken to a shipper, rather than picked up, and there must not be any reference to the jeweler’s address on the label.
RPS’s Jewelers Block policy also provides coverage in the event of stone breakage during repairs, resetting and cleaning. In addition, when sales volumes are higher during specific times such as Christmas/Hanukkah, Valentine’s Day, and Mother’s Day, retailers can add a Peak-Season endorsement to the policy to reflect increased inventories.
Off-premises coverage is available for individuals traveling abroad to purchase stones for their inventory. The amount of coverage will depend on the destination and how much inventory they are purchasing.
RPS’s program also enables jewelers to offer customers the opportunity to buy coverage to protect the jewelry pieces they purchase so they are insured when leaving the store.
Rock Solid Coverage
“Jewelers Block is a complicated coverage,” notes Gallagher-Burton, “with regard to properly insuring the value of the inventory. There are many forms, for example, that don’t include replacement cost coverage, something of which agents and brokers should be aware.
“Also, risk management and loss-control protocols are key in underwriting the policy. It’s important that the insured can illustrate that they are following strict risk management guidelines and meeting safety, alarm system and other requirements in obtaining coverage.”
RPS partners with multiple carriers on its Jewelers Block policy. We can write the coverage as a standalone policy or combine it with other policies such as General Liability Property, Excess Umbrella, Cyber, EPLI and Workers’ Compensation to help ensure coverage gaps don’t exist and for more affordable pricing.