JEWELERS
Description of operations: Jewelry stores offer high-value precious jewelry or low-value costume jewelry. Operations that sell precious and semi-precious jewelry often offer additional services such as appraisals, jewelry and/or watch repair, jewelry manufacturing, resetting, sizing, and custom-designed jewelry. Stores that sell costume jewelry often sell related apparel items such as hats, purses, or stockings. Type of jewelry store may offer ear-piercing services. The store may be independent or part of a regional or national chain that sells jewelry and related items online and in stores. High-end stores may offer pickup and delivery services. The Telephone Consumer Protection Act (TPCA) requires retailers to obtain express written consent from customers before sending text spam ads or robocalls.
Property exposures are moderate. Ignition sources are generally limited to electrical wiring and heating and cooling systems. These should be maintained and meet current codes for the occupancy. The exposure increases if the jeweler manufactures, repairs, or resets jewelry due to the heating or soldering of metals and metal forming or setting. While the values on hand may be substantial, the inventory is excluded from coverage under the property form. Instead, it is covered under a jewelers block form as inland marine. Furnishings, gift items, and stock other than jewelry may be included in either the jewelers block policy or the property coverage form. Due to the potential for break-ins, appropriate security controls must be taken, including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department. Business interruption exposures are high because sales may peak at particular times during the year, such as Valentine's Day, Mother's Day, and Christmas. Storage vaults, security systems, equipment, and stock may be difficult to replace quickly.
Inland marine exposure comes from accounts receivable if the store offers credit, computers to transact sales and monitor inventory, jewelers’ block for inventory and items belonging to customers, and valuable papers and records for customers’ and vendors’ information. Backup copies of all records, including computer files, should be made and stored off premises. A jewelers’ block policy is specifically designed to protect the jewelry, precious metals, and precious or semi-precious gems owned by the jeweler and customers’ jewelry that is being cleaned, repaired, reset, or redesigned. Individual items may be shoplifted. High-value or designer items may be stolen in larger quantities after hours. Security measures are a must because of the high theft potential. Adequacy of vault security is critical. There must be accurate tracking of customers’ items when in the care of the jeweler so that items are returned to the rightful owner. Other considerations are the number, type, and size of safes or vaults. If there are window displays, there must be adequate theft or crime controls. There should be physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department. Some jewelers will have fine arts such as paintings or sculptures. Outdoor signs can be struck by lightning or vehicles, be blown over in heavy wind, or collapse due to the weight of ice and snow.
Crime exposures are from employee dishonesty and theft of money and securities from holdup or safe burglary. Background checks, including criminal history, should be conducted on any employee handling money. There must be a separation of duties between persons handling deposits and disbursements and reconciling bank statements. Receipting, inventory monitoring, and regular auditing are important. Money should be regularly collected from cash drawers and moved away from the collection area, preferably to a safe on premises. Bank drops should be made throughout the day to prevent a buildup of cash on the premises. Any travel with expensive items should be tightly controlled.
Premises liability exposure is high due to the number of visitors to the store. There should be good lighting and adequate aisle space to prevent slips and falls. All non-expensive goods should be kept on easily reached shelves, so customers do not pull items down themselves. The stock dropped on floors by customers must be retrieved promptly. Customers may be injured by sharp edges or pins protruding from jewelry. Floor coverings must be in good condition with no frayed or worn spots on carpet and no cracks or holes in flooring. Steps and uneven floor surfaces should be prominently marked. Sufficient exits must be provided and be well marked, with backup lighting systems in case of power failure.
