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Risk Summary: Retail Jewellers

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Risk Summary: Retail Jewellers

Description of operations: Jewellery stores can offer either high-value precious jewellery or low-value costume jewellery. Operations that sell precious and semi-precious jewellery often offer additional services such as jewellery and/or watch repair, jewellery manufacturing, resetting, and sizing, as well as custom designed jewellery. Financial condition of the operation is a concern as well as inventory control and turnover. Careful consideration needs to be given to these items to ascertain sound operations.

Property exposures can be high if operation is involved in repair, manufacturing, or resetting. Hazards result from the heating or soldering of metals, and metal forming or setting. The inventory will be excluded from cover under the common property forms. A Jewellers block cover will need to be purchased in order to provide cover necessary. Gift items and stock other than jewellery may be included in either the jewellers block policy or the property cover form.

Other exposure for jewellers block is always significant. Theft is the major exposure concern if precious or semi-precious metals and gems are used. What is the inventory of unset or loose gemstones? Theft controls, alarms, lighting, and access to the premises are items to evaluate. Other considerations are to the number, type and size of safes or vaults. Are there any window displays and, if so, what are the theft or crime controls? The block may include cover for the Goods Held in Trust exposure from repair work.

Crime exposures centre on employee dishonesty. Upfront security clearance is the first line of defence along with references. Next is separation of duties and monitoring of inventory. Any travelling with expensive items should be tightly controlled.

Premises liability is always a concern in a retail exposure where the public comes to the premises. Floor covering must be in good condition with no frayed or worn spots in carpet and without cracks or holes in flooring. Sufficient exits must be provided and be well marked, with backup systems in case of power failure.

Car parks and pavements need to be in good repair with snow and ice removed, and generally level and free of exposure to slip and fall. If the business is open after dark, adequate lighting and appropriate security for the area must be present.

Products liability for this type of operation is normally low.

Employers’ liability exposure is from lifting, which can cause back injury, hernia, sprain, and strain. What kind of training do employees receive, and what types of material lifting or conveying devices are used. Additional exposures could be from cuts and burns in the manufacturing or repair operations. Chemical exposure also may exist, and potential for eye, skin, or lung injuries must be reviewed.

Minimum recommended cover:

Machinery and Contents, Business Interruption, Employee Dishonesty, Money and Securities, Book Debts, Computers, Jewellers Block, Public/Product Liability, Employee Benefits, Excess of Loss/Difference in Cover, Employers’ Liability

Other covers to consider:

Building, Material Damage, Computer Fraud, Goods Held in Trust, Specie and Fine Art,  Employment Practices Liability, Commercial Motor Liability

Broker: The covers listed below are suggested for consideration. After evaluating each of the listed covers, check the recommended blank by those that apply specifically to the client. Make sure both the exposure and the cover are explained thoroughly to the client.

Client: For each of the covers that the broker has recommended, initial whether you have chosen to accept or reject that cover in the blanks provided.

Please note that this list is NOT exhaustive. If you have a specific need not on the list, please contact us at TH March to address your needs and to arrange a bespoke policy.

Download a copy of the risk summary and client/broker cover agreement checklist here.

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