Learn how jewelry manufacturers insurance helps jewelry industry manufacturing businesses protect themselves against the many complex risks they face every day. Whether your business is large or small, or you make one or many products - you need the right commercial insurance program to protect you.
Jewelry Manufacturers Insurance
Jewelry Manufacturers Insurance. Jewelry manufacturers produce items for personal adornment, including bracelets, brooches, earrings, necklaces, nose rings, other rings, and similar wares. Higher-value items may be made of gold, silver, or platinum, with or without precious or semiprecious stones.
Costume jewelry materials include ordinary metals, bone, gemstones, glass, plastic, and wood. Metals can be cast into forms, crafted by hand, drawn as wire, electroplated, heat treated, pressed, cut from stock, or stamped. Due to the variety of materials used, prices of finished jewelry can run from a few dollars to hundreds of thousands of dollars each.
Being a jewelry manufacturer is such a rewarding career. Your job is to craft beautiful baubles out of priceless gems and metals that will dazzle your clients. However, while there's no doubt that you enjoy your work, it's absolutely essential that you take the right precautions in order to protect yourself from the many liabilities that you and your business are exposed to. There are many pitfalls that can arise in your industry; clients can file negligence lawsuits against you, employees can become injured on the job, your property can be damaged, and of course, you run the risk of theft and vandalism because you work with such rare and expensive items.
For these reasons, it is absolutely essential that you invest in the right type of jewelry manufacturers insurance coverage.
Why Jewelry Mnaufacturing Businesses Need Commercial Insurance Coverage
As a jewelry manufacturer, the very nature of your business is associated with several liabilities. Because you work with precious gemstones and metals, theft is one of the biggest risks. There are other serious risks that can arise and put you in serious financial trouble, too; for example, you or an employee could damage a client's heirloom while trying to craft it into a new piece, a member of your crew could be injured while on the job, or your property could be damaged in a fire, flood, or other act of nature.
These are just some of the risks that you are exposed to you in the jewelry manufacturing industry. Should an incident occur, you could be held liable for damages and medical bills, not to mention the fact that you could be hit with serious legal fees. Without jewelry manufacturers insurance coverage, you would have to pay for these expenses out of your own pocket, which could put you in serious financial peril. There's a chance that you could end up going bankrupt and even lose your entire business.
By having a solid insurance plan in place, you can keep your business and yourself safe. Should the unforeseen arise, your insurance carrier will help to cover the costs of damages, medical bills, legal fees, and other expenses. In other words, insurance can prevent you from financial devastation; hence the reason why it is so crucial.
Types Of Insurance For Jewelry Manufacturers
There are several types of insurance policies that jewelry manufacturing businesses should carry. Some of the highly recommended forms of jewelry manufacturers insurance coverage include the following:
- Commercial General Liability: This form of insurance will protect your business from several types of incidents that could lead to significant financial loss. It provides coverage for third-party accidents and injuries that can arise on your property; for example, if a vendor is injured while visiting your commercial space or if an employee damages a client's property, you could end up facing a lawsuit. Commercial general liability insurance will help to cover the cost of litigation, including lawyers, court fees, and settlements.
- Commercial Property: In the jewelry manufacturing industry, theft is a serious risk. If someone should rob your facility, commercial property insurance will help to cover the cost of replacing stolen items; however, that's not all that this type of insurance covers. It will also help to cover the cost of any damages that your commercial building or equipment may sustain in the event or as a result of an act of vandalism.
- Errors and Omissions: This form of insurance offers protection against legal claims that clients may make stating that you or your employees were negligent or that your work was not adequate. For instance, if a staff member damages a customer's jewelry, this form of insurance will cover the cost of the repairs, as well as any legal action that the individual may take.
These are just a few examples of the types of jewelry manufacturers insurance that you should carry. Having the right type of insurance is absolutely essential so that you can avoid potential financial ruin.
Jewelry Products Manufacturing's Perils And Risks
Property exposures consist of office, plant or shop and warehouse for raw materials and finished goods. Ignition sources can include electrical wiring, heating and cooling equipment, production machinery, and dust explosions. Metalworking hazards can include brazing, grinding, heat-treating, and welding.
Plastic can catch on fire and explode, producing a heavy black smoke that impedes firefighting efforts. Flammable liquids may be used for finishing and polishing. These should be properly labeled and stored away from combustibles.
Due to the theft limitations on jewelry in standard property policies, most manufacturers should purchase jewelers block policies to obtain adequate limits. As fires are often used to cover up a theft, controlling the theft exposure also reduces the exposure to fire. Appropriate security controls should 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.
Equipment breakdown exposures include malfunctioning production equipment, dust collection and ventilation systems, electrical control panels and other apparatus. Breakdown and loss of use of the production machinery could result in a significant loss, both direct and indirect, especially, time element.
Crime exposure from employee dishonesty and theft is very high if the manufacturer works with precious or semiprecious metals or gemstones due to their high street value. Employees may act alone or in collusion with outsiders in stealing money, raw materials, or finished stock. Background checks should be conducted on all employees. There must be a separation of duties between persons handling deposits and disbursements and handling bank statements.
Inland marine exposure includes accounts receivable if the manufacturer offers credit, bailees customers, computers (which may include computer-run production equipment), exhibitions, goods in transit, jewelers block, and valuable papers and records for customers' and suppliers' information. While the primary hazard is theft, the items are also susceptible to other causes of loss, including breakage and transit exposures.
There is a significant bailee exposure for sizing, cleaning, engraving, and repairing items for customers. Safes or vaults should be burglar- and fire-resistant.
Premises liability exposure is normally low as access by visitors is limited. If the manufacturer has a showroom or offers tours, visitors may be injured by slips, trips, or falls. Fumes, dust, and noise from metalwork or gem polishing could pose a nuisance hazard to neighbors. Off-premises retail locations or showrooms may be used to meet with customers.
Products liability exposure is generally low. Some metals produce allergic reactions when worn. Labeling of components as nonallergenic or hypoallergenic should be supported by quality control. If children's jewelry is made, lead paint and cadmium are a particular concern, as well as choking hazards from small components such as beads.
Environmental impairment exposure can be moderate to high depending on the materials and processes used and the types of waste that are produced. Plastics and fiberglass may be toxic and are flammable, the catalysts may be caustic, and the final product is usually not biodegradable. Contaminants from chemicals, paints, and solvents used in metalworking processes can pollute the air, surface or ground water, or soil. Disposal procedures must adhere to all EPA and other regulatory standards.
Business auto exposure may be high if the manufacturer transports raw materials or finished products. Manufacturers generally have private passenger fleets used by sales representatives. There should be written procedures regarding the private use of these vehicles by others. Each driver should have an appropriate license and an acceptable MVR. All vehicles must be well maintained with documentation kept in a central location. Because of the high market value of jewelry, vehicles should be locked, fitted with alarms, and not left unattended once loaded or during transport.
Workers compensation exposure can be very high. Injuries from production machinery are common, as are burns, cuts, slips, trips, falls, and foreign objects in the eye, hearing loss from machinery noise, repetitive motion injuries, and back injuries from lifting. There should be safety training, protective equipment, and guarding of machines. Workstations should be ergonomically designed. Dust generated by metalwork or grinding of stones and gems requires respiratory protection devices, as well as eye protection and eye wash stations.
Work with plastics, flammable liquids and chemicals can cause skin irritation, eye irritation, and possible long-term occupational disease. Drivers of forklifts and vehicles may be injured in accidents. Sales representatives carrying precious gems or metals may be injured or killed in holdups.
Jewelry Manufacturers Insurance - The Bottom Line
We hope this article on jewelry manufacturers insurance has been informative. To find out more about the different types of insurance policies you should invest in, how much coverage you should carry, and whether or not there are coverage options that can be customized to meet your specific needs, contact a reputable insurance broker.
Further Reading On Manufacturing & Product Liability Insurance
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