A jewelry chain was fortunate to have insurance when one of its stores was struck by burglars. Not so fortunately, a problem popped up after a claim was filed for the loss. The insurer denied the claim. The two parties sought relief from the courts. Their arguments revolved around the importance of a provision regarding how the store’s high-valued merchandise was handled when the store was closed for business.

Click below to see how the courts viewed the circumstances. Their opinions differed over a requirement that, when closed, 70% of the store’s jewels were to be secured in a safe.

There are few businesses with a greater concern over theft losses than jewelers. Their merchandise checks the main boxes to attract the attention of thieves. The property is:

• Highly valuable

• Extremely light weight

• Easily concealed and transported

• Highly desired by general public

• Quite liquid, so it can be readily sold/fenced

Click here for information on what businesses may do to safeguard their property from theft losses. It is from E-marketing for Agencies found in Advantage Plus.

With jewelers merchandise being so vulnerable to loss via theft, insurance companies take caution when designing coverage. Policies typically include provisions to help minimize their risk. In our featured case, the burgled premises’ claim was, initially, rejected. The action by the insurance company was based on language that required most of the inventory be kept in a safe when the store was closed. Upon finding that this was not the case, the carrier moved to void any coverage. A higher level court eventually ruled that limited coverage was still due.

Click here to see what situations are, typically, ineligible for protection under inland marine products. It is from the Commercial Property section of PF&M, found in Advantage Plus

The insurer’s reluctance to respond to the jeweler’s claim is a reminder of the importance of strict adherence to information provided by an insured which become warranties. While a court’s action prevented a harsh consequence, an opposite decision could have easily been upheld. Insurance professionals often play a critical role in minimizing situations that can result in financial ruin. The ability to fulfill that role depends upon sufficiently understanding a given operation. Besides the reliance upon warranties, those who serve jewelers must also be aware of the wide variety of exposures they face.

Click here for information providing various details on jewelers, including general operations and risks that are inherent in different lines of business. It is from the Commercial Lines Survey found in Advantage Plus.