Jewelry Insurance for Dummies: Jewelers Mutual Insurance
September 06, 08
By Ronit Scheyer
On April 20,2005, four masked men entered a jewelry store in Evesham, Pennsylvania. One man pulled out a handgun and ordered employees and customers to the floor, while the other three smashed the store's display cases and made off with $907,033 worth of jewelry.
A 26-year-old man is facing jail time after robbing a jewelry store in Scarborough, UK in June. More than 60,000 ($119,000) in jewelry was taken from the store at knifepoint, after the man entered the store wearing a small towel over his face and brandishing a kitchen knife. He yelled at employees and shoppers to get down before taking two diamond rings and a watch and fleeing.
In late July, a man in Florida reported to authorities that almost $5,000 worth of jewelry had been stolen from his house in a burglary in which the burglar broke a small hole in a bedroom window and lifted the window to gain entrance to the house. The incident happened in broad daylight between 8 am and 3:30 pm.
A robber in Pittsburgh got away with a $25,000 40 carat ruby and diamond necklace in July. The necklace was swiped during business hours while the owner was busy with a customer. Surveillance video showed the man taking the necklace from the display case, pocketing it and walking out the door. The owner didn’t realize the necklace was missing for another hour.
These victims join the countless others who have been burgled or robbed of their jewelry, whether in a personal, business or residential context. Not only should these stories remind jewelers how important it is to have insurance protecting valuables in case of loss or theft, but, according to Dave Sexton, vice president – loss prevention of Jewelers Mutual Insurance, (JMI) most of the tragedies involving jewelry theft are completely preventable. The important thing, he says, is not whether or not to take the steps necessary to protect oneself and prevent these kinds of incidents. “No jeweler today needs to be convinced of the need for security,” he says. Rather, the challenge is “to decide what effective level of protection they need, given the nature of their business, their location and other related circumstances.”
This “effective” protection, Sexton says, is security set up in a series of layers. “Effective protection incorporates layers of appropriate physical security, including safes and vaults, reliable electronic protection and consistently applied procedural precautions. The physical security is intended to keep the burglar out. The electronic security will detect the burglar in the event the physical security fails. The safe or vault will buy the necessary time for the police and/or Central Station alarm company runner to respond to, prevent or minimize the loss.”
JMI’s protection emphasis is on the side of loss prevention, which means they focus their energies on preventing tragedies rather than cleaning up after them (although of course cleaning up after would also be included in a policy). The mind-set of prevention boils down to assessing every single aspect of a jeweler’s business, on-premises and off-premises, including traveling to shows and doing business in exotic locations around the globe, to decide what their policy will look like – namely, what kind of risk-mitigation and loss-prevention strategies the business needs to undertake in order to be insured.
As to what steps jewelers can take to protect themselves, Sexton says, “Procedural security recommendations, which are the most important, cost the jeweler little or nothing, except a small amount of staff time. The cost of this staff time,” he emphasizes, “is minor when compared to the devastating costs of a serious crime.” In addition, if jewelry crime data over the years is analyzed, it is clear that if sound procedural precautions were adopted and consistently applied, “the majority of crimes against jewelers could be prevented.”
And there is little to no difference between retailer, wholesalers and manufacturers, as to what security risks these businesses face. “Security issues faced by jewelry retailers, manufacturers, wholesalers and gem dealers are very similar,” he says. “Particular types of security challenges are rarely confined exclusively to…any segment of the industry.”
Jewelers Mutual Insurance insures anyone who owns or deals in jewelry, whether it be jewelry manufacturers, wholesalers, retailers or a bloke who just bought his future fiancee a diamond engagement ring. Their insurance agents and brokers assist clients, mostly jewelers, in developing a cost-effective insurance program that is tailored to the individual needs of the jeweler.
Many different factors are taken into account when assessing a jeweler’s situation, what would be the right policy for them, including what their individual needs are and what kind of premium their plan calls for. These include the location of the business (geographically and whether it is in an urban or rural area); the type of business (retail, retail-wholesale, wholesale-manufacturing, etc.); what kind of access the general public has to the business and its merchandise; where business takes place (on-premises, off-premises, traveling, trade shows); details of its premises and operational procedures (its “predominant exposure”) and others.
The company also acts as a reference for jewelers, directing them to security providers relevant to their needs. This service is included in the client’s policy, and is part of JMI’s aim to act as a resource to direct their clients to the resources they need to protect themselves and their business. “We maintain extensive relationships with security providers,” Sexton explains, “and we don’t endorse one over the other, either. We give the client at least three different names and let them choose…This is helping jewelers do what they need to do to take the proper steps to lower their risk of loss.”
“Establishing a working relationship with an informed broker is a huge asset to jewelers being able to reach the resources they need,” Sexton says. JMI implements a focused solution to the issue, which includes the simple plan of having brokers and agents with a lot of experience in the business, who have built and continue to build long-term relationships with clients in the jewelry industry.
This plan also includes an education program, with sessions several times a year, and Jewelers Mutual (JM) University, a virtual, Internet-based classroom with courses designed to educate JMI’s customers and the jewelry industry about safety, security and insurance in topics such as basic self-protection methods from thieves to reducing travel risk on the road. Sexton is candid about why an insurance company would go to such extents to prevent loss. “Number one, it’s good business for us,” he says, “but with that, it succeeds in protecting the business of the jeweler, which is good for the industry.”