Business Insurance for Jewelry Stores

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Business insurance is designed to protect a business owner’s financial assets and is an essential investment for a jewelry store.

 

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About General Liability Insurance

All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance (or CGL).

Some of the risks CGL insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

While businesses aren’t legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient CGL policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.

Learn more about the risks covered by general liability insurance.

COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR A JEWELRY STORE

Example 1:  A customer is looking at a display case when she leans too hard on the glass. The glass breaks, severely cutting her hand, and she requires immediate medical care. A general liability insurance policy will likely assist in paying for her medical treatment.

Example 2:  You have hired a marketing firm to develop a new ad campaign for your jewelry business. One of your competitors files a lawsuit, claiming the ad libeled her business. Your general liability insurance policy will pay for the cost of your legal defense. It will also pay for the cost of a settlement if one is necessary.

Example 3:  One of your employees is rushing to answer a ringing phone when he accidentally runs into a customer. The impact knocks the customer into a display case, causing him injury that requires medical care. He decides to sue your business. Your general liability insurance policy will pay your legal costs, including any payouts or settlements that you wind up paying as a result of the lawsuit.

Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It’s always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.

COST OF GENERAL LIABILITY INSURANCE

The average jewelry store in America spends between $400-$1,500 per year for $1 million in general liability coverage.

Check out the chart below for a snapshot of average CGL expenditure across a variety of industries:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • Number of employees
  • Per-occurrence limit
  • General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy. A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

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OTHER TYPES OF COVERAGE JEWELRY STORES NEED

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all jewelry store should obtain:

 

Product Liability Insurance

There is always the chance that a customer could decide that one of your products caused them injury. If this happens and the customer files a lawsuit, your product liability insurance would pay for hiring an attorney and your various legal costs. It would also cover the cost If you settle the case out of court.

 

Commercial Property Insurance

Stocking inventory for a jewelry business is a serious financial investment. If something were to happen that destroyed your inventory, like a major fire, it would be extremely costly to replace. Commercial property insurance would help to pay for the replacement of your inventory.

TYPES OF COVERAGE SOME JEWELRY STORES MAY NEED

In addition to the policies outlined above, there are a few other types of coverage your jewelry store may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.

 

Workers’ Compensation Insurance

In most states, if you have employees, you are required by law to carry workers’ compensation insurance. If one of your employees is injured performing a work-related task and requires medical care, workers’ comp insurance would pay for it. Your policy would also help to cover the employee’s lost wages if they were unable to work due to the injury.

 

Crime Insurance

Crime insurance is designed to protect your jewelry business if you are the victim of criminal activity—whether the criminal activity is performed by your employee or by someone not associated with your business. Should a crime occur, like an employee stealing some of your inventory, then your crime insurance policy would help to cover the cost of damages to your business.

ADDITIONAL STEPS TO PROTECT YOUR BUSINESS

Although it’s easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business’ financial losses after an incident occurs, but it’s much better to avoid losses altogether.

 

With this in mind, here are three things you can do to better protect your business:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up a limited liability company (LLC) to protect your personal assets. (Refer to our guide for step-by-step instructions on how to form an LLC in your state.)
  • Streamline your business’ internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.

FREQUENTLY ASKED QUESTIONS

What is included in a business owner’s policy?

A typical business owner’s policy includes general liability, business interruption, and property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.

What is the difference between business insurance and general liability insurance?

“Business insurance” is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.

Do I need insurance before I start a business?

You should invest in coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it’s best to be proactive when it comes to protecting your assets. After all, you can’t buy insurance to cover a loss that has already occurred.

Will insurance protect my business from everything?

Not necessarily. Certain exceptions may be written directly into your policy, and some perils may be entirely uninsurable. Be sure to discuss the scope of your policy in-depth with your agent to avoid being blindsided by holes in your coverage.