Jewellery sector forced to re-evaluate insurance policies
today Apr 15, 2019
A recent case of robbery by a logistics company official has brought to light that jewellery businesses are not covered by their insurers for goods that disappear in transit or while unattended, the India Bullion and Jewellers Association reported.
Last week, a logistics company official made off with 11 kilograms of gold jewellery worth Rs 3.5 crore ($526,000) during a shipment. Although the Mumbai police were able to retrieve 10 kg of the jewellery, the jewellery business’ insurance provider stated that its policy does not cover “infidelity”, which refers to either gross negligence or dishonesty by a logistics company or its employees as well as disappearance of goods.
“The owner of the jewellery firm was entertained neither by the insurance company nor the logistics provider,” said Surendra Mehta, the national secretary of the IBJA, as reported by ET Bureau. The IBJA reported that this news came as a shock to many jewellery businesses and has caused the industry to re-evaluate its insurance stance.
“Many only now realise that if goods disappear while in transit because of infidelity or unattended vehicles, the extant insurance policy doesn’t cover such loss,” Bhavesh Kataria of India’s largest insurance broker for jewellery businesses, Kataria Jewellery Insurance, told ET Bureau.
As the recent case saw goods disappear from a logistics truck, Mehta stated that the logistics firm itself would have to be insured for the loss, not the jewellery business.
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