06012016Wed
Last updateTue, 31 May 2016 9pm
Hale’s Jewelers looks back on 160 years of business

Hale’s Jewelers looks back on 160 years of business

entrepreneur: a person who starts a business and is...

JA fights for jewelers on Capitol Hill

JA fights for jewelers on Capitol Hill

Association continues to promote industry policy p...

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Canadian company looking for gold in South Carolina

Canadian company looking for gold in South Carolina

COLUMBIA, SC A Canadian corporation is looking for gold in an area of South Carolina near the historic Brewer mine, an abandoned operation that once produced tons of the precious mineral but today is undergoing a major pollution cleanup.

Pancontinenta...

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Industry Events

Swiss Watch by JCK and LUXURY Watch to sponsor Time for Kids

Swiss Watch by JCK and LUXURY Watch to sponsor Time for Kids

Swiss Watch by JCK and the new LUXURY Watch will be sponsoring Time for Kids, the annual watch giveaway during the Jewelers for Children Facets of Hope event. Every attendee at the Facets of Hope event on June 5, 2016 at Mandalay Bay will be given a ...

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On The Move

Adam Graham joins Omi Gems/Omi Privé

Adam Graham joins Omi Gems/Omi Privé

Jewelry industry veteran Adam Graham has joined Omi, Inc. as Director of Sales and Marketing. In this new role, he will oversee the selling, marketing and public relations functions of the gemstone company and its fine jewelry division Omi Privé.

“We ...

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What's New

Jewelers Mutual to debut Immersive Technologies at LUXURY, JCK Las Vegas

Jewelers Mutual to debut Immersive Technologies at LUXURY, JCK Las Vegas

(IDEX Online News) – Jewelers Mutual Insurance (JMI) has announced that it will unveil three new technologies during the Intervision Salon at Luxury, Elite Enclave, and throughout JCK Las Vegas.

Jewelers Mutual has partnered with Excelion Partners to ...

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Featured Articles

Not all was lost in the fire

Not all was lost in the fire

Namano salvages jewelry (and memories) scorched in house fire

There are over three hundred house fires each month in the state of Georgia alone. That’s a pretty mind-boggling number; multiply it nationally and the results are staggering: thousands and...

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Latest News

Canadian company looking for gold in South Carolina

3 HOURS AGO
Canadian company looking for gold in South Carolina

COLUMBIA, SC A Canadian corporation is looking for gold in an area of South Carolina near the historic Brewer mine, an abandoned operation that once produced tons of the precious mineral but today is undergoing a major pollution cleanup.

Pancontinental Uranium Corp. said in a news release last week t...

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Not a girl’s only best friend

1 DAY AGO
Not a girl’s only best friend

One of my favorite shows on TV is ESPN’s series 30 for 30. They are mini documentaries about important historical moments in sports, with the tagline “What if I told you…” The directors proceed to present a story the audience believes they know, only to reveal there is more than meets the eye. I’ve ...

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Swiss Watch by JCK and LUXURY Watch to sponsor Time for Kids

3 HOURS AGO
Swiss Watch by JCK and LUXURY Watch to sponsor Time for Kids

Swiss Watch by JCK and the new LUXURY Watch will be sponsoring Time for Kids, the annual watch giveaway during the Jewelers for Children Facets of Hope event. Every attendee at the Facets of Hope event on June 5, 2016 at Mandalay Bay will be given a chance to win one of an array of donated watches. ...

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Rapaport Town Hall Meeting to debate synthetic diamonds

4 HOURS AGO

JCK Las Vegas Jewelry Show - June 6, Monday, 8:00-10:00 am

(LAS VEGAS) - Rapaport is sponsoring a town hall meeting that will provide an open forum for members of the jewelry trade to respectfully debate the pros and cons of synthetic diamonds.

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Adam Graham joins Omi Gems/Omi Privé

1 DAY AGO
Adam Graham joins Omi Gems/Omi Privé

Jewelry industry veteran Adam Graham has joined Omi, Inc. as Director of Sales and Marketing. In this new role, he will oversee the selling, marketing and public relations functions of the gemstone company and its fine jewelry division Omi Privé.

“We are thrilled to have Adam join us at this stage in...

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AGS names Scott Berg new President, appoints Board of Directors

1 DAY AGO
AGS names Scott Berg new President, appoints Board of Directors

(LAS VEGAS) - The American Gem Society (AGS) elected Scott Berg, Certified Gemologist (CG) of Lee Michaels Fine Jewelry in Baton Rouge, LA, as President of the Society’s Board of Directors, assuming the role from outgoing president, Louis Smith, CG, of Smithworks Fine Jewelry. The appointment was mad...

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Jewelers Mutual to debut Immersive Technologies at LUXURY, JCK Las Vegas

4 HOURS AGO
Jewelers Mutual to debut Immersive Technologies at LUXURY, JCK Las Vegas

(IDEX Online News) – Jewelers Mutual Insurance (JMI) has announced that it will unveil three new technologies during the Intervision Salon at Luxury, Elite Enclave, and throughout JCK Las Vegas.

Jewelers Mutual has partnered with Excelion Partners to offer these innovations: the JM Journey App, a hol...

Readmore

Sterling Reputation to unveil new collection at JCK

4 HOURS AGO
Sterling Reputation to unveil new collection at JCK

Sterling Reputation is excited to announce that a new collection of adjustable lariat bracelets will make their debut at the JCK Las Vegas Show. Designed by Sterling Reputation’s resident stylist Pearl Woei, these stunning bracelets are available in 30 unique and detailed styles and have a triple ke...

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Setting Limits

Insuring a jewelry store: Determining the type of insurance to buy - and how much

The type of insurance

Jeweler Rhoda Lyte opened her new jewelry store and for insurance, called on a friend who sold property and casualty insurance. About the only information the agent needed in order to put the policy in force was the name and address of the store, the building construction, and the limit of coverage Rhoda wished to carry. Rhoda explained to the agent that she needed $250,000 - figuring $50,000 for her fixtures and general contents and $200,000 for her jewelry inventory.

Rhoda was pleased with the policy. For an affordable premium, she had all of her contents covered at replacement cost for a broad range of perils ("all risk") with a modest $500 deductible, plus $1,000,000 general liability, and even loss of earnings insurance.

Then subsequent to the coverage being placed in force, burglars compromised Rhoda's alarm system, broke into the store through the roof, and with the alarm system down, wheeled the safe out the back door.

Rhoda's loss was all of her $200,000 inventory, $30,000 of customer's property that was in her custody, $10,000 in diamonds that were on memo to the store from a vendor, and $5,000 for her safe - totaling $245,000. Under Rhoda's lease, the costs of repairing the roof and the back door were the landlord's responsibility and were claimed on the building insurance policy. Rhoda was just thankful that her policy limit of $250,000 would be enough to cover her part of the loss.

When Rhoda received her settlement check, the amount was $7,000. "When do I get the rest of it?" was her question to the agent.

"There isn't any more - this is all the company is paying for the loss."

It was then that Rhoda learned of a limitation clause which is standard in general business insurance policies. The clause stated in clear language that where theft of jewelry was concerned, the company would be liable for no more than $2,500. Rhoda had received that amount plus $5,000 for her stolen safe - the only property stolen that was not "jewelry," less her $500 deductible.

"What about my customers' property - and the diamonds that I had on memo? Doesn't the policy give me special coverage for other people's property?" The policy did have some coverage for property of others, but the jewelry limitation superseded all other aspects of the policy. $2,500 was all that would be paid for jewelry, regardless of whom it belonged to.

Rhoda was not only out of business, but left in significant debt to her customers, her vendor - and her bank. She had purchased the wrong kind of insurance.

The agent explained that he had sold this type of policy to dozens of businesses, and the jewelry question had just never come up before - he didn't know the jewelry limitation clause was there.

The limit of coverage

Alexander Wright opened a jewelry store similar to the one that Rhoda Lyte owned. But unlike Rhoda, Alexander knew to ask for a Jewelers Block policy; he had been told that a standard business insurance policy would not meet the needs of a jewelry business.

Alexander's agent had not written Jewelers Block insurance before, but he had obtained an application from another insurance broker and he gave it to Alex to complete. There were questions about Alex's safe, and the store's alarm system - which Alex answered to the best of his ability.

An inventory figure was requested on the form and Alex entered $200,000 - the amount of inventory he expected to have on opening day. A limit of coverage blank was also on the form, and $200,000 was entered there also since that was what the inventory would be.

There was a question about customers' property; to be certain that customers would be well protected, Alex entered $75,000 - the most that was expected to ever be in the repair box at one time. A figure of $15,000 was entered in answer to a question about memo and consignment merchandise -- enough to cover bringing in a few diamonds to show to a customer.

After being in business for several months, Alex had a robbery. With Alex and his assistant tied up on the floor and the doors locked, the gunmen were committed to take all that they could. And so they took the merchandise out of all of the showcases, cleaned out the safe, and took the repair box.

Alex's inventory had increased a bit since opening day, to $215,000 - all of which had been stolen in the robbery. The customer's property totaled $25,000 (thankfully there were separate records with customers' own estimates of value), and $10,000 in memo diamonds were stolen. The total loss was $250,000.

The insurance policy paid $199,000 for the loss - the policy limit of $200,000 less $1,000 deductible. The figures for customers' property and memo merchandise that Alex had thought he was asking separate coverage for, were average exposure questions. By not understanding the form fully, Alex had requested $200,000 as a total limit for inventory, customers' goods, and memo merchandise.

So two instances of jewelers not getting what they thought they were buying by way of insurance. One might be tempted to conclude that, no matter what a jeweler does, insurance companies never pay off fairly. But the lessons to be learned are from Rhoda's and Alex's own different mistakes - which are not uncommon among jewelers starting out in business.

Rhoda's mistake was in assuming that a jewelry business could be insured the same as most businesses, and that all she needed was a standard package policy, which almost any agent could write.

Alex knew what kind of insurance he needed, but he didn't know where to go for it. The agent he went to gave Alex the responsibility of completing the Jewelers Block application rather than completing it himself with Alex's input. The application is complex, and Alex misinterpreted some of the questions and provided incorrect information - the most critical being the limit of coverage.

So let's take one more crack at this situation and see if we can end on a happier note.

Jules Galore was planning to open a jewelry store for the first time. But having been in the jewelry business for a number of years, he had several friends in the industry to whom he could go for ideas and advice. One of the things he already knew was that he would need special insurance, and he asked his contacts who they recommended he talk to about insurance.

As a result, Jules was able to find someone who had experience in insuring jewelers and was familiar with both the policy and the application. Rather than send Jules a complicated form to complete, the agent met with the jeweler to complete the application for him. Additionally, the agent was able to give Jules valuable advice concerning his safe and his alarm system - to help Jules be certain that minimum insurance standards were being met.

A Jewelers Block policy was put in force with a solid carrier, with an appropriate limit of coverage for inventory, customers' property, and memo merchandise. And when Jules had a loss, because the policy had been written correctly, the insurance company could pay it and Jules could continue in business.

Rhoda's lesson: for a jewelry business, standard insurance won't fill the bill.

Alex's lesson: the right type of insurance still may not be good enough if it isn't correctly written.

Jules' lesson: the right kind of insurance, combined with a good carrier and an insurance agent who is experienced in writing jewelers' insurance and capable of being a part of the "management team" of the business, can make the critical difference when there is a loss.

P.S. Congratulations to all of the staff of Southern Jewelry/Mid-America Jewelry News for 20 years of producing a journal for the jewelry trade that is always relevant, eye-opening, and a pleasure to read. I'm honored to have been a part of your team for all of that time and it is indeed a pleasure to see how you have grown and where you are today.

Bob Carroll of Robert G. Carroll and Associates is a Certified Insurance Counselor who has been insuring members of the jewelry industry for more than a quarter of a century - representing Jewelers Mutual and other carriers in Arkansas, Oklahoma, Tennessee, and Mississippi. He can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it..


 


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