Let's begin by being sure that we are talking the same language - the words vault and safe are not interchangeable.
A safe is a box-like container designed to protect its contents from fire, burglary, or both. A safe is manufactured in a safe factory and sold as a complete unit. Thus most safes (floor safes being the exception) are capable of being moved from one location to another, though possibly with difficulty because of size and weight.
By contrast, a vault is a room that is designed to protect its contents from fire, burglary, or both; whether it may be moved from one place to another is discussed later.
A safe is like a refrigerator or freezer in your home; a vault is more like the walk-in cooler at a grocery store or florist.
FACT or MYTH? A safe is a safe; except for size, they're all the same.
MYTH. Underwriters Laboratories is an independent testing facility that tests and rates safes and vaults, as they do thousands of other products used in the United States.
Fire safes are designed and built with the primary purpose of keeping whatever is inside below 3500 F (the flash point of paper) for a period of time. Through prototype testing, fire resistive safes are generally rated as 1 hour, 2 hours, or 4 hours. Note that no manufacturer makes the claim of producing a fireproof safe. A very hot fire will eventually increase the inside temperature of any container and destroy the container itself.
Burglary safes are designed to protect the contents from thieves, though some also provide fire protection.
Underwriters Laboratories subjects burglary safes to simulated burglary conditions conducted by UL technicians in a controlled and measured environment. So that safes may be compared one with another, the tools are prescribed and thus limited - even though real burglars are not restricted in the tools they use to attack safes in jewelry stores.
Many of the UL tests utilize common hand tools which people often have in their garages or tool chests; i.e., hammers, chisels, wedges, small electric hand drills, etc. Real burglars on the other hand attack safes with high pressure drills with diamond bits, concrete saws, and hydraulic devices (like the "Jaws of Life" equipment associated with fire rescue), and even magnesium burning bars which create such intense heat that special fire-protective equipment must be worn.
Because of this inherent "unfairness" of the system, UL tests and the ratings that are developed are useful only in comparing safes - not in determining how long it would take a real burglar to penetrate a safe. And just as no fire safe is fireproof; no burglary safe can be considered to be burglarproof. Given enough time and the appropriate tools, any safe can be compromised.
FACT or MYTH? UL safe ratings are in code to make them difficult to understand.
MYTH. Underwriters Laboratories gives us an easy to understand rating system which clearly describes the test involved in achieving the rating. To understand UL ratings, you just need to know a few abbreviations.
TL stands for the word tools. In most cases, these are the common hand tools mentioned above.
TR stands for the word torch - an oxyacetylene welder's torch.
TX is used to indicate a test using explosives. (Myth-Busters fans may remember an episode in which a safe was sealed and filled with water and then detonated from the inside. The door was blown off and the safe was destroyed - as was everything inside.) UL technicians would have conducted the test a bit differently.
The numbers in the rating system define the minutes of the test - 15 or 30 for tool and torch tests, 60 for the rarely administered explosives test.
Thus a TL-30 safe (the most common rating) passed a 30-minute test by UL technicians using prescribed common hand tools - at least its testing prototype did. The safe was not subjected to a welder's torch or any type of heat attack. A TRTL-15 safe passed only a 15-minute test, however technicians also were permitted to attempt to burn (torch) their way into the safe.
Typical ratings are: TL-15, TL-30, TRTL-15, and TRTL-30. Now you know what each of those ratings means in terms of the UL test.
The goal of these UL tests is to create an opening of a certain size, attacking only the door of the safe and the framing around it.
Why not the sides, top, and bottom of the safe, you ask?
There is an important higher level: the "X 6" test (pronounced "eks-six" not times six - it is not a math test). "X 6" signifies that the entire safe was fair ground for UL testing rather than just the front. Thus a safe that carries the rating "TRTL 30X6" may be considered to provide a much greater level of security than, say, a TL-15 rated safe.
INSURANCE CONSIDERATIONS: Insurers have long relied on the UL testing of safes as indicators of relative protection. While safe dealers may be able to provide an "idea" of the values that an insurance carrier will allow in a particular rating of safe, you should know that insurance underwriters independently make such determinations. Therefore it is important to have a discussion with your own insurance carrier before purchasing a safe - or vault.
If planning a new store, bring your insurance agent in early to help you with decisions about safes, vaults, and other elements of security.
FACT or MYTH? A "vintage" safe with 10" thick walls and "stair stepped" door framing, and mounted on huge steel castors, is probably an excellent security safe.
MYTH. Unless there is a steel compartment inside, what is stated above most likely describes a fire safe rather than a burglary safe. No burglary safe today is manufactured with wheels on it; and over time, the cement in the walls of such a safe may have compacted to the point that even adequate fire protection would be questionable. Without a device known as a relocking system, many fire safes can be opened by a burglar in less than 10 seconds!
What about gun safes for jewelry security? An insurance carrier may or may not approve a gun safe for jewelry security, but as just stated - check first. Many gun safes are unrated, which means untested; and some carry a UL rating of "RSC," which stands for "Residential Security Container" - a designation also applied to wall safes and other containers intended primarily for home use. An RSC test would be equivalent to "TL-5" if there were such a rating; i.e., common hand tools, only the door and facing, 5 minute test.
FACT or MYTH? A vault is inherently more secure than a safe.
MYTH. Vaults are more convenient than safes, not necessarily more secure. "I don't need a safe - my store is in an old 1920s bank building, and I have the original vault to use," may not be an encouraging phrase to an insurance carrier. And like safes, vaults may be built for different purposes. For many types of business, fire is the greatest concern, so there are fire vaults which are intended to protect important records. A fur vault is designed more for fire and moisture considerations than for theft (fur inventories are not as "portable" as jewelry). And banks in the 19th and early 20th century were more concerned with robbery ("Stick ‘em up, and put the money in the saddle bags!") than with burglary.
Rooms which are intended to serve as vaults are sometimes built of cement blocks, which are brittle and can be chipped through fairly easily. So whether such a wall provides significant security would depend on how much steel rebar might have been used in construction. A block wall with a fire-rated door that looks like a vault door is more correctly defined as a "stockroom." Whether or not it is appropriate for jewelry inventory would depend on other factors, such as the level of inventory, the general environment (town or city), the alarm protection - and the underwriter.
Underwriters Laboratories defines four levels of vaults: Class M, Class I (or 1), Class II (2), and Class III (3). The actual UL testing is most often applied today to modular vaults; i.e., vaults which are purchased as prefabricated panels for on-site assembly.
Prototypes of Class M modular vault panels are subjected to 15 minutes of attack in the UL testing facility; Class I, to 30 minutes of attack; Class II, to one hour; and Class III, 2 hours. So in referring back to the "Fact or Myth" question - a TRTL 30 X 6 safe would be held to provide a greater level of security than a Class M or Class I vault; on the other hand, there is likely to be far more capacity for storage in the vault; hence, more convenient.
[Convenience is not to be taken lightly. Because of the ease of daily loading and unloading, a vault can save hundreds of hours of employee time, as well as shop-wear on merchandise. Most jewelers who once experience working with a vault would never return to using only a safe or safes.]
For poured on site vaults, the American Society for Testing and Materials (ASTM) is an independent testing facility familiar to the construction industry which defines vaults by construction and materials rather than actual testing. There is an equivalency however, because ASTM refers to the UL rating system.
By ASTM standards, a poured on site vault of Class M level must have walls that are 9" thick that includes two layers of a 4" steel grid that are off-set to one another. A Class I on-site vault will have 12" walls with 3 layers of grid; Class II will have 18" walls with 4 grids; and Class III, 27" walls with 5 grids.
In every instance of comparison that the author has experienced, modular vs. contractor-poured, modular vaults prove significantly less expensive when the same level of protection is compared. Another advantage of modular over on-site poured is the wall thickness - a factor which infringes dramatically on floor space that could be put to other use.
For example: a 10' X 10' vault creates 100 sq. ft. of area in which a jeweler can wheel carts of merchandise each day. A Class III poured-on-site vault will require an additional 110 sq. ft of "footprint" for the walls alone; a Class II vault of the same size will require 69 sq. ft. of additional floor space.
Modular vault panels range from 4" to 13" in thickness, Classes M through III (3), which cuts the amount of floor space required by more than half. Also since panels are manufactured to order, vault design is not restricted to the typical rectangular shape; the vault can be configured to fit the design of the store.
FACT or MYTH? A modular vault is portable and can be moved to another site in the future.
Both FACT and MYTH. A modular vault, even if attached to the floor or building, can be de-constructed in the same manner that it was constructed and taken to another site. Whether that is cost-effective at the time is another question. One jeweler, faced with the logistics of keeping a current store open and operating while a new location was being built, ultimately determined that it was more expedient to abandon and build new than attempt to move the original vault.
And one more FACT or MYTH: A vault costs more than a safe.
That depends on your frame of reference. In pure cost, a vault is a more costly investment. But in terms of dollars and useable space, a vault narrows the gap and almost always surpasses a safe in cost per cubic foot. Add to that the convenience factor, which also has dollar value - a vault will save money in the long run.
For more information about safes and vaults as applied to your unique situation, remember to rely on your jewelers insurance professional, or the loss-control department of your insurance company.
The jeweler was showing expensive watches to a person he believed to be a qualified customer. There were no other customers in the store and the jeweler had control of his entrance with a magnetic locking system, and so the jeweler was comfortable in allowing the customer to take her time in comparing several items with one another.
Employment Practices Liability Insurance
corporations get sued for their employment practices.
• Fact: More than 50% of EPL charges are filed against small businesses.
I don’t need it because most claims can be settled out of court.
• Fact: True, most claims never get to trial but the typical claim will cost $65,000 to investigate, defend, and settle; many cost much more.
We treat our employees like gold (or diamonds) and we bend over backwards to always be fair.
• Fact: Claims can come from the least expected; not just employees, but also previous employees, and even potential employees – people who apply and, for whatever reason, don’t get hired.
Don’t the laws only apply to companies that have more than a certain number of employees?
• Fact: There are “size of company” applications to certain federal and state laws (defined by number of employees), but the civil actions have no such restrictions.
EPL claims only happen in cities - like New York, Chicago, and Los Angeles.
• Milwaukee: Three female employees of a jewelry store sued the store for permitting a sexually hostile work environment that included inappropriate banter, touching by manager, and retaliation.
• Michigan: A female employee and coworker alleged sexual harassment and abuse while working at a retail store; she was fired by the owner.
Jury award: $347,250
• Anchorage: A pregnant employee claimed she was denied a promotion due to her pregnancy.
• Rhode Island: A jewelry manufacturer closed two plants. A particular employee who had received good performance reviews and who had been promoted during her tenure with the company during her employment was dismissed. She did not have seniority. She claimed wrongful termination based on age discrimination.
Jury award: $70,000
• Washington: A female store associate of a retail jewelry store claimed that the manager used foul and offensive language about female employees and customers.
Jury award: $138,600
• Solano, CA: A woman claimed that she had been laid off from her job with a retail store because she had begun wearing a traditional Muslim headscarf.
• Greenbelt, MD: Four employees sued the store for discriminating in hiring, pay, promotions, and conditions of employment against a particular race of employees and applicants.
What are listed above are charges of sexual harassment, sexual discrimination, wrongful discharge, hostile work environment, religious discrimination, and racial discrimination. These are all matters of public record in cities and towns across the United States.
None of the cases listed would be covered under a jeweler’s Business Liability insurance. The language in General Liability that excludes coverage from claims that fall under the broad umbrella of “employment practices” is clear and unequivocal.
And “claims” may be brought against a company by current employees, former employees, leased workers, temporary or seasonal workers, applicants seeking employment, or non-owner officers.
It is illegal for an employer to discriminate on the basis of age, color, pregnancy, race, religion, sex or gender, national origin, or physical or mental disability. Note also that the term “disability” has been very broadly interpreted in the courts.
In the federal law, Title VII, the ADA (Americans with Disabilities Act), and the ADEA (Age Discrimination in Employment Act, 1967), the following employment activities are monitored and regulated:
One problem faced by employers today is that management does not always know about underlying problems. For example a “hostile work environment” may exist in the perception of an employee or employees which management may not deem to be inappropriate – or may not even be aware of.
One important question management must be asking itself today is, are there avenues that are both friendly and unthreatening which permit an employee to confidentially discuss hostile work situations? Another question is, are there procedures and standards in place which can address the issue?
Sexual harassment has been defined as any unwelcome advance or request for sexual favors. It can include quid pro quo, (literally this for that, i.e., “if you will do something for me, I will do something for you”), and may be closely related to or may accompany hostile environment situations.
Sexual harassment is not limited to the work site – it may just as easily occur elsewhere, with or without the employer’s sponsorship of an off site event.
Damages may include civil assault and battery, intentional inflictions of emotional stress, and invasion of privacy.
Are there trends?
From 1994 through the year 2000, employers prevailed in 50% to 69% of cases overall (Jury Verdict Institute) – of cases that actually went to trial. However the majority of cases do not go to trial at all and result in settlement between plaintiff and defendant, at an average cost to defend of $150,000.
And each year sees a higher number of claims filed than the year previous.
Experts predict that the economy may become another factor which increases the number of claims in the future, as employers may be forced to consolidate resources and be forced to release employees; and as replacement jobs become more difficult to find.
As previously stated, this type of exposure is a wide gap in coverage for most jewelry business employers, due to clear exclusions in the general liability policy.
Special coverage is becoming available both through agents’ excess and surplus markets (the “wholesale” part of the jewelry industry) and through some standard carriers.
The type of coverage is “Employment Practices Liability Insurance,” or more simply, “EPLI.”
Unlike standard general liability insurance products, most EPLI is written on a “claims made” basis; whereas general liability is considered “occurrence” based.
Here’s the difference.
In general liability insurance, it is when an insured event occurred that determines coverage; and a policy covers those events which occur while the policy is in force.
For example: a person falls in your store during a time that your coverage is with company A, but suit is not brought until later, when coverage has been replaced by company B. It is company A which must respond to the claim, even though it is no longer your insurer.
In most EPLI, the time that the claim is made is what determines coverage. In the above example, if it were an employment practices situation rather than a slip-and-fall, insurance company B would have to address the claim – even though the insured event (e.g., sexual harassment) occurred before it was your insurer.
Some cautions, as result of this distinction:
1. If buying EPLI to replace a previous carrier’s coverage, be certain that the new insuror is aware of the previous coverage and agrees to accept any claims which might now arise from previous events. This is referred to as going back to the retro date, i.e., the date at which EPLI was originally purchased.
A new carrier should assume coverage for “past sins” reported in the new policy period.
2. If canceling EPLI altogether, it is wise to purchase extended coverage for any unknown claims which may have occurred while coverage was in force, but which may appear after cancellation of coverage. In insurance vernacular, this is sometimes referred to as buying a tail, which may extend for a year or more after cancellation. There is a cost for the extended coverage, but much less than the in-force policy.
Now a history test: When was the Civil Rights Act originally written?
The answer is 1866 – at the conclusion of the Civil War! It prohibited discrimination based on race and national origin.
The Civil Rights Act of 1866 remained unchanged for 98 years, at which time the Civil Rights Act of 1964 was passed, extending protections to sex, religion, and pregnancy.
Following that: the Age Discrimination Act of 1967 (amended in 1978 and 1986) was passed; and then the Family Medical Leave Act of 1993.
The Americans with Disabilities Act is more recent legislation and contains five parts or “titles” - a very important one to the retail industry being Title III which pertains to full and equal enjoyment of goods and services, facilities or privileges of private entities serving the public.
Title III is the reason that entrances, rest rooms, and other facilities sometimes must be redesigned to make them more “user friendly.”
For more information about the Americans with Disabilities Act, contact the U. S. Department of Justice, Civil Rights Division, (800) 514-0301 (voice) or (800) 513-0380 (TTY).
So do you need EPLI?
If you do not have the coverage, now is the time to ask your insurance professional about it. You may be pleasantly surprised at the cost, relative the potential loss. The premium is based on the number of employees that you have (and hence your risk of having a claim).
Remember the cautions about replacing or canceling EPLI coverage.
To assume that you are not at risk and do not need the coverage because you “treat your employees well and they all love you” may be naïve – and not the best strategy. While employers often are vindicated, it is the cost of defense that is the important issue – and EPLI is designed to cover that cost, as well as the damages should you lose.