Insurance company CHES Special Risk says there’s been an “alarming” increase in theft claims affecting jewelry stores across Canada.
In a report in the Canadian Underwriter, Gary Hirst, CEO and President of CHES Special Risk, said: “Jewelry stores are high-value targets, and their risk profile can change quickly. It’s crucial that our brokers stay ahead by offering mid-term check-ins to reassess coverage and help clients prevent theft before it happens.”
Emily Newell, Jewelers Block Insurance expert at CHES, said simple steps, such as reviewing security audits, ensuring staff are trained in loss prevention, and updating inventory management systems, can significantly reduce the risk of theft.
“Jewelry stores regularly acquire new stock or make operational changes. Without a mid-term check-in, these updates might leave them underinsured or exposed to unnecessary risks,” she said.
Here are the key tips for brokers to address during a check-in, according to CHES:
- Security Audits: Encourage clients to regularly assess their alarms, surveillance systems, and safes.
- Staff Training: Remind clients of the importance of ongoing training in loss prevention and security protocols.
- Inventory Management: Regular inventory checks can both prevent loss and expedite claims.
- Physical Barriers: Reinforcing display cases or upgrading locks can provide an extra layer of security.
- Coverage Updates: A mid-term review allows for the reassessment of coverage to ensure it matches the client’s current stock and operational needs.
George Minakakis, Founder of the Inception Retail Group, said he does see a rise in theft overall, but jewelry stores are targets of greater value.
“Jewelry stores are vulnerable because of the nature of their products. All one needs to do is walk through a mall, and you will see either police, security, or both at the front door of the store,” he said. “Generally, stolen goods are disposed of by a network of buyers who resell them. You can likely find the product on online marketplaces from private sellers.
“However, jewelry is tougher to dispose of, and you’ll likely find it traded at pawn shops for cash, private sales, or even melted down, as most of it is untraceable. Unless they are high-end, authentic watches with serial numbers, you might find them heading overseas. There is a very sophisticated subculture and black market behind all of this that serves as a supply chain for others.
“To mitigate their risks, jewelry stores need deterrents such as unbreakable glass and secondary security doors. They also need an emergency button for authorities to be summoned. These thieves have scoped out the location beforehand and can be very brazen. If it happens during business hours, your priority is to protect your staff and customers.
“Sadly, we will see this increase because of the economic benefit it garners for some.”
Stephen O’Keefe, President, Bottom Line Matters, Retail Loss Prevention Advisory Service, said jewelry store thefts are definitely on the rise.
“It’s interesting that the insurer or the broker is giving advice to their clients, the insured, to harden themselves as a target,” said O’Keefe. “I’ve always said in loss prevention that the way you would look at risk is three ways. Like anything you transfer, accept or mitigate.
“And when you transfer the risk in this particular case just like a car you get insurance. You’re inviting somebody else in to share the responsibility and the fact that the insurer is saying hey you guys need to harden yourselves as a target, because we can’t take on this financial responsibility of continuing to compensate for these mass robberies, when an insurance company gets involved it’s per incident.
“Let’s say a Walmart as an example has 30,000 incidents (of shoplifting) in a year and they lose $1 million. You can’t go to the insurance company and say can you compensate me for the $1 million in loss and so it’s absorbed. But when you have one robbery that somebody steals $1 million you can go to the insurance company and say it’s one incident and it’s under my crime provision of insurance under robbery and I want to be reimbursed for the $1 million.
“Jewelry stores face losses in that second scenario. They don’t have volume of small incidents like a department store or convenience store or a grocer but they are susceptible to individual incidents of robbery. Having said that, on the shoplifter side you have the same type of thing. I can work volume and steal 100 times from a department store and get $50,000 or I can take the greater risk of robbing a jewelry store one incident and getting $50,000. And where we’re at is just the economy of scale. Shoplifters are targeting larger prey and we are seeing more incidents of jewelry store robbery whether that’s at gunpoint or whether that’s those smash and grabs where we see 15 people going into a store and they smash all the showcases and they run off. We’re seeing a lot more of that and it’s taking place.”
He said insurance companies are looking at jewelry stores to come up with innovation as they can’t rely on the same old lockable glass showcase where the jewelry is put in. The thieves have figured it out. There are some tamper proof showcases.
“The insurers are saying exercise due diligence and do a review of what you expect because you are either softening yourself as a target or the criminal element is coming after you,” said O’Keefe. “So the nudge they are giving the insureds is a good one. Exercise due diligence. Do a review.”
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