Written by Baird Financial Services for Cape Precious Metals
You’re probably familiar with your auto and homeowner’s insurance policies, but what about insurance for your business? Not only can these policies be more complicated, but the stakes are higher: Overlook a detail in the fine print, and your claim in the event of theft or other kind of loss might be denied.
Let’s have a look at a few key areas of a jewellers block policy that are of utmost importance when structuring and understanding a policy ‘fine print”…
We at BairdFin consulted with Hentie Snyder, specie underwriter, who has extensive experience in underwriting both specie and Jewellers block. Snyder has been underwriting in this insurance section for the past 12 years and advises that premiums are calculated on the individual risk as opposed to simply being market-related.
“It is a risk that requires infrastructure, expert knowledge and hands-on experience and based on accurate information obtained from the potential insured”.
Snyder adds that for many years much of this complex cover was placed overseas at high cost and with policy conditions better suited to foreign business requirements rather than the needs of South African retailers and traders.
“The Specie and Jewellers block insurance cover can only be undertaken with specialist knowledge as the transport, sendings, personal carry, storage, entrustment etc are relatively complicated risks and in some cases very high values are involved. It needs to be insured in a way that covers all eventualities. A focused structure, expertise, secure transport and storage management experience as well as innovative insurance solutions tailored to specific needs and circumstances are required.”
Case to case underwriting of individual risks should be backed by careful, diligent research and evaluation of every risk. For these policies to be effective the underwriters must have adequate knowledge of the risk to effectively provide tailor-made cover to the needs and circumstances of each potential insured.
There are ways to manage and mitigate risks linked to this type of insurance and potential policy holders are encouraged to liaise closely with an experienced broker who specialises in placing these types of risks. Only when the underwriting of these policies is based on the actual experience of the broker and underwriter, do the policies become effective and simplified, which in turn provides the insured with peace of mind.
Snyder warns against this type of insurance being taken within a general insurance cover because it becomes much too complex. “To be effective, Specie and Jewellers Block policies rely on specific cover wording applicable to the nature of the risks that arise in this environment.”
Cover areas:
Static / On site in safe cover:
- This type of cover is specific to valuables being locked in a safe in or out of trading hours including hijacking, armed robbery, fire, accidental damage and theft. Normally the display of valuables will be covered under this section and is normally limited to a certain value after business hours.
Transit cover by road, air, sendings by courier:
- This type of cover is specific to the transportation of valuables either by a courier service, by the owner or representatives of the insured or by a security provider including hijacking, armed robbery, fire, accidental damage and theft.
Fidelity cover:
- This cover extension provides cover against the insured’s staff members stealing from their employer. This extension can only be provided as an additional extension to the main policy cover for employees that are in the insured’s employment for more than 2 years.
Exclusions:
- Normally the fidelity cover extension is excluded from the main cover and can be added as an optional extra.
- Mysterious disappearance or unexplained losses are normally excluded from this cover
- Kidnap and ransom are also normally excluded.
Most insurers will make this cover available at additional premium to the policy.
Security:
Normal security or risk prevention is always taken into consideration when underwriting these risks and will most definitely influence either the rating (Premium) of the policy or the excess applied to each and every incident. The lower the security level the higher the premium and / or the excess structure.
The minimum requirements for on-site cover will include:
- A SABS categorised safe, installed in the premises and bolted to the floor or permanent walling of the insured’s premises.
- CCTV monitoring the store between and after trading hours.
- A SAIDSA approved alarm linked to panic buttons for the in-store staff and linked to an accredited armed reaction security provider.
Any additional security prevention measures implemented by the policy holder such as fog spray, pepper spray, armed security on site and smash and grab on display counters will have a positive effect on the premium and / or excess of the policy.
BairdFin is CPM’s trusted insurance broker. If you’re looking for a specialist who can put together a Jeweller’s Block policy that meets your store’s needs, look no further:
Baird Financial Services
(open Market correspondence license with Lloyds of London)
Darryn Baird
082 856 4221
016 349 6870
darryn@bairdfin.co.za
www.bairdfin.co.za
