California jewelers operate in one of the most dynamic but high-risk retail environments in the country. Smash-and-grab robberies, organized retail crime, and burglary rings have been on the rise, with jewelers often targeted because of their easily transportable, high-value inventory. While many jewelers purchase insurance, an alarming number are underinsured. It’s a costly oversight that can turn a devastating loss into a business-ending event.
What Does it Mean for Jewelers to be Underinsured?
Jewelers are underinsured when coverage limits are lower than the actual value of your inventory or business property. For jewelers, this typically happens when:
- Inventory values are based on outdated appraisals.
- Owners underestimate the replacement cost of stock.
- You mistake a standard business owner’s policy (BOP) for sufficient coverage.
- You renew coverage without reassessing your business value and needs.
According to a 2023 survey, 75% of small businesses are underinsured. In the jewelry sector, where inventory values fluctuate with global gold, diamond, and gemstone prices, this risk is even greater.
California’s High-Risk Environment
California ranks among the top states for organized retail crime. In 2024, the Jewelers’ Security Alliance (JSA) reported $142.5 million in industry crime losses nationwide. In 2023, the JSA reported a sharp rise in smash-and-grab theft in California. Los Angeles and San Francisco jewelers, in particular, face heightened risk from both violent robberies and professional burglary crews.
In addition to crime, your jewelry or wholesale business faces the risks of natural disasters from earthquakes, wildfires, and landslides. Any of these disasters can wipe out inventory at your retail location or warehouse. According to the UCLA Anderson School of Management, the economic impact of this year’s wildfires in Los Angeles is estimated to be as high as $131 billion. Insured losses are estimated at $45 billion, which means many property and business owners face devastating financial situations.
The Cost of Being Underinsured
To illustrate the consequences of being underinsured, let’s look at a hypothetical example. Imagine a Los Angeles jeweler with $2 million in inventory but only $1 million in coverage. A total loss from burglary, fire, or catastrophic theft would leave them with $1 million of unrecovered loss. Beyond lost stock, there are additional costs, including:
- Legal fees from contract disputes.
- Lost customer trust.
- Months of lost revenue while rebuilding.
It’s vital to ensure that your policies reflect current market values. Otherwise, insurers may only cover a fraction of the loss.
How Jewelers Can Avoid Underinsurance
Insurance may not be top-of-mind regularly. But incorporating small changes into your business practice to make sure you’re properly covered in the case of loss ensures you don’t lose time and money due to underinsurance. Here are four steps you can take to get started.
- Update Inventory Values Regularly – Conduct quarterly appraisals and ensure insurance reflects current replacement costs.
- Choose Specialized Coverage – Jewelers block insurance is designed specifically for jewelry retailers, covering risks not included in general business policies.
- Review Coverage Annually – Work with a broker who is experienced in jewelry insurance to reassess risk exposure and spot gaps in coverage.
- Account for Peak Seasons – During the holidays, inventory levels may spike; coverage should scale accordingly.
Final Thoughts
Underinsurance is a silent but severe risk. In California’s high-crime retail environment, being underinsured could mean losing not just your inventory—but your entire business. Jewelers block insurance tailored to California’s unique risk profile ensures that when the worst happens, you can recover and rebuild.
If you haven’t reviewed your policy in the last year, now is the time. Don’t wait until after a loss to discover a gap.
