Jeweller's Block Insurance

There is a special package policy devised to meet the various Insurance requirements of jewellers pursuing their business. This insurance is governed by a Market Agreement which came into force from 1st April 1980. This type of business can be accepted by Regional Offices only, upto the limit allowed. In case a Divisional Office receives a proposal, they would forward the same to the Regional Office with their observations on the risk, for approval and rating.

Moral hazard is of considerable importance in this class of business. Acceptance should be confined to first class risks of parties who are known for their integrity, good reputation and who are recommended by D.O.

A careful scrutiny of the proposal form is also necessary in order to know the claims history, security factors. Since earlier history has bearing on underwriting a proposal of jeweller operating for the 1st year is a bad risk.

The proposal form is a detailed one. Since the business relates to valuable items like gold and jewellery, the security factors of the risk assume considerable importance. Answers to question 3, of the proposal form should be carefully scrutinised. The question relates to particulars of safe, of occupancy at night, night watchman, burglar alarm system etc. Separate limits (sums insured) are provided for risks on the premises, outdoor risk when the property is in the custody of gold smiths, brokers, agents, cutters, partners and employees including transit risks. There is a separate item for furniture fixtures and fittings at the premises. The proposer has to complete question No.8 very clearly, giving full values for insurance. The basis of valuation shall be the insured cost plus 10% thereof.

Scope of Cover: The cover accorded by the policy is divided into 4 sections as under:

Section 1: This section covers loss of or damage to property, whilst contained in the premises where the insured's business is carried on or at other premises where the insured's property is deposited as specified in the Schedule by Fire, Explosion, Lightning, Burglary, House breaking, Theft, Hold-up, Robbery and Riot and Strike damage only. Terrorism also becomes part of cover at an additional premium of Rs. 0.03 per mille.

Limits of indemnity (i.e. Sums insured) are shown separately for: The property insures is defined as stock in trade

• Property on the premises;
• Property in display windows;
• Property in locked safe;
• Cash and currency notes;
• Bank Lockers

consisting of jewellery, gold and silver ornaments, pearls, precious stones, cash, currency notes etc. usual to the conduct of the insured's business, belonging to him or held in trust or on commission for which he is responsible.

The cover is subject to the warranty that all stocks whilst at the premises specified in the schedule shall be secured in locked burglar proof safe at light and at all times out of business hours.

Section II: This covers accidental loss of or damage to property insured whilst carried/conveyed outside specified premises for the purpose of insured's business only unless excluded.

• Whilst in the custody of the insured, his partners or employees;
• Property insured (excluding cash and currency notes) whilst in the custody of persons not in regular employment of the insured, such as brokers, commission agents, cutters or goldsmith. Infidelity of brokers, cutters however, is not covered.

This is subject to a warranty that for values above Rs. 2 lack with any one person, the stock should be secured in built-in locker of a steel cupboard after business hours at all times. Also the sum insured under this section should not exceed the gross sum insured under Section I.

Section III: This section covers insured property (excluding case and currency notes) whilst in transit within India or

• Registered Insured Post parcel not exceeding the limit of Rs.5 lakhs or 10% of the sum insured under Section I, whichever is less.
• Airfreight (20% value should be declared to the Airline and included in the Airway Bill.)
• Angadia (Courier Service in North is not covered).

Transit by means other than above are covered. Basis of valuation for property other than cash or currency notes in respect of section I, II and III shall be the insured's cost plus 10% thereof.

Section IV: This Section covers loss/damage to office furniture, fixture, fittings, being used in connection with the insured's business whilst contained in the premises, where the insured's business is carried on caused by fire, explosion, lightning, burglary, housebreaking, theft, hold-up, robbery and riot & strike damage only.

Exclusions:

• Loss or damage to property whilst the same is being worked upon or from any process of cleaning, repairing or restoring.
• Unexplained loss discovered during stock taking.
• Loss/damage to property whilst it is being worn by the insured, partner, director or members of their family and whilst in their custody for the purpose.
• Whilst the property insured is at any public exhibition.
• Theft or disappearance of property from road from Vehicles where such Vehicles are left unattended.
• Depreciation, deterioration, wear and tear, moth, vermin, mildew.
• Loss or damage to any item of glass, porcelain and other articles of britle or fragile nature unless such loss or damage arises from accident to the vehicle, vessel, train, air craft by which the insured property is conveyed.
• Theft by infidelity or dishonesty of any member of insured's family, employee, traveller, messenger in the employment of the insured, any customer, broker, cutter, goldsmith, angadia.
• Loss/damage whilst in transit other than specified in the Section III Transit risks are also excluded on property intended for export and on property imported. Such risks could well be covered under a Marine Cargo Policy for diamonds and precious stones which is subject to market agreement.
• Detention, confiscation, nationalisation, requisition, occupation or wilful destruction by government / authority.
• Loss following the use of the key to the safe or any duplicate thereof belonging to the insured unless such key or duplicate was obtained by threats or violence.
• Property insured in window display at night or whilst kept out of safe after business hours.
• Any consequential loss or damage including delay.
• Convulsions of nature like earthquake, volcanic, eruption, cyclone, flood, storm atmospheric disturbances, etc. Also war and allied perils.
• Nuclear weapons and radio active contamination.

Claims:

• The company shall not be liable in respect of any loss or damage if the same is not discovered within 60 days of the happening of the event.
• Upon the happening of any loss the insured should give notice to the police and to the company within 24 hours. Detailed statement of loss or damage with an estimate of the loss should be submitted to the company within 14 days from the date of the loss.
• Company has the option to reinstate or replace rather than make a cash settlement of the claim.
• Basis of valuation shall be cost plus 10% thereof.
• On payment of claim, the sum insured under Section I shall be reduced by the amount of the loss and the sums insured under the various items in Section II and III will be reduced in the same proportion as in Section I. The company may, at its option, agree to reinstate the full sums insured at prorata additional premium.
• Arbitration condition in the event of disputes as to quantum, liability being otherwise admitted.
• The claim becomes time-barred 12 months after it is declined unless suit is filled against the company within this period.
• Condition of Average applies to claims under Section I of the Policy.
• Pair and Set Clause : The company will pay the value of the particular part or parts without reference to any special value of such part of parts forming part of a pair or set but in any event Company's liability will not exceed proportionate part of the sum insured in respect of the pair or set.

Notes:

• All the following rates are inclusive of Riot & Strike damage risks.
• If required by the insured, cover for Earthquake insurance may be included in the policy at an additional premium as per Fire Tariff.
• Coverage under this policy, for Sections I and IV only without any coverage under Sections II and III, required by the proposer, may be considered.