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Last updateTue, 09 Feb 2016 8pm
The Story Behind the Stone: Diamond & gemstones cut to push light performances

The Story Behind the Stone: Diamond & gemstones cut to push light performances

Transparent gemstones and diamonds are magnets of ...

Darling Imports helps you keep up with the trends

Darling Imports helps you keep up with the trends

Every year consumers concern themselves with fashi...

South Carolina jeweler re-opens after second theft

South Carolina jeweler re-opens after second theft

“But those who suffer he delivers in their sufferi...

Jewelers for Children announces 2016 Rings of Strength Tour

Jewelers for Children announces 2016 Rings of Strength Tour

Bike, run or walk to help children in need

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10 Diamond Encrusted Items

10 Diamond Encrusted Items

Here are 10 items that probably don’t need diamonds. Also included: diamond-like encrusted objects, because they too can be shiny and cost an absurd amount of money, apparently.

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Industry Events

Midwest Jewelers Conference & Show - A new show with a history

Midwest Jewelers Conference & Show - A new show with a history

 

The 2016 Midwest Jewelers Conference & Show (MJC) is the “new” Jewelers Educational Conference, a regional jewelry conference and show that has been held biannually in suburban Kansas City, Missouri for 16 years. The name change, along with a mo...

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On The Move

Texas Institute of Jewelry Technology awards outstanding students

Texas Institute of Jewelry Technology awards outstanding students

An awards ceremony was held for students attending the Texas Institute of Jewelry Technology (TIJT) at Paris Junior College at the end of the fall semester.

Winners of a student design contest were: Jonathan Martin in CAD/CAM, Tony Henderson in Wax Ca...

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What's New

ASHI Diamonds launches Bridal 2016 marketing program

ASHI Diamonds launches Bridal 2016 marketing program

(NEW YORK) - ASHI Diamonds is excited to unveil its New 2016 Bridal Book - “The Perfect ONE for Her.” Every bride experiences the trials and tribulations of finding the perfect bridal ring. In showcasing proven evergreen designs as well as the latest ...

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Featured Articles

Esperanza Diamond Tour starts in Arkansas

Esperanza Diamond Tour starts in Arkansas

Hailed as most valuable diamond ever found in U.S.

There are events that happen with such incredible timing and good fortune it almost seems like divine intervention is at work. Such is the case with the 8.52-carat Esperanza Diamond rough. From its se...

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Latest News

10 Diamond Encrusted Items

53 MINS AGO
10 Diamond Encrusted Items

Here are 10 items that probably don’t need diamonds. Also included: diamond-like encrusted objects, because they too can be shiny and cost an absurd amount of money, apparently.

Readmore

Teenager gets to keep $20,000 gold bar found in German lake

1 HOUR AGO
Teenager gets to keep $20,000 gold bar found in German lake

Gold prices up 5% since start of year

Swimming in an Alpine lake on a warm August day has many allures, but for a German teenager it fortuitously became the best investment decision in her young life.

The teenage girl from Germany, who remains anonymous, last summer found a gold bar at the bottom of t...

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Jewelers for Children announces 2016 Rings of Strength Tour

9 DAYS AGO
Jewelers for Children announces 2016 Rings of Strength Tour

Bike, run or walk to help children in need

Jewelers for Children (JFC) will hold the fourth installment of the very popular Rings of Strength on Thursday, June 2 in Las Vegas. Start time will be at 5:30 a.m. outside the tour bus entrance at the Mandalay Bay Resort Casino. Participants will be able to...

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Midwest Jewelers Conference & Show - A new show with a history

9 DAYS AGO
Midwest Jewelers Conference & Show - A new show with a history

 

The 2016 Midwest Jewelers Conference & Show (MJC) is the “new” Jewelers Educational Conference, a regional jewelry conference and show that has been held biannually in suburban Kansas City, Missouri for 16 years. The name change, along with a move to Kansas City’s downtown Power & Light Ent...

Readmore

Texas Institute of Jewelry Technology awards outstanding students

9 DAYS AGO
Texas Institute of Jewelry Technology awards outstanding students

An awards ceremony was held for students attending the Texas Institute of Jewelry Technology (TIJT) at Paris Junior College at the end of the fall semester.

Winners of a student design contest were: Jonathan Martin in CAD/CAM, Tony Henderson in Wax Carving and Andrew Ferguson in Fabrication and Desig...

Readmore

Industry veteran Michael Haider joins Taché USA as VP of Sales

14 DAYS AGO
Industry veteran Michael Haider joins Taché USA as VP of Sales

(NEW YORK) – Taché USA, a leading manufacturer of fine diamond jewelry, from bridal to fashion, is pleased to announce that industry veteran Michael Haider has joined the company as Vice President of Sales.

Michael will have the responsibility of working with existing customers as well as developing n...

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ASHI Diamonds launches Bridal 2016 marketing program

1 HOUR AGO
ASHI Diamonds launches Bridal 2016 marketing program

(NEW YORK) - ASHI Diamonds is excited to unveil its New 2016 Bridal Book - “The Perfect ONE for Her.” Every bride experiences the trials and tribulations of finding the perfect bridal ring. In showcasing proven evergreen designs as well as the latest trends to hit the bridal market, ASHI’s Bridal lin...

Readmore

Jewelry Website Designers rolls out exciting new website

9 DAYS AGO
Jewelry Website Designers rolls out exciting new website

Jewelry Website Designers (JWD), a leading designer of websites for the jewelry industry, has announced the launch of a completely new website ( www.jewelrywebsitedesigners.com ) for 2016 that includes more intuitive navigation, and a line up of valuable add-on services enabling independent jewelers t...

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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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