Key Takeaways
- Property insurance covers losses and damages to valuable inventory, equipment and property.
- General liability insurance protects against lawsuits from injuries on premises or issues with high-value goods.
- Workers’ compensation covers work-related injuries and illnesses.
- Product liability shields businesses from issues with defective products.
- Business interruption protects cash flow if operations are disrupted.
Introduction
As merchants dealing in expensive precious metals and gemstones, businesses in the NAICS 423940 industry face unique risks that require proper insurance protection. Several types of coverage are especially important to have in place to guard against losses and lawsuits that could threaten long-term viability.
Property Insurance
Property insurance provides critical protection for jewelry and precious metals wholesalers. It covers losses and damages to their valuable inventory, equipment, and property from hazards like fire, theft, and natural disasters. This allows their business to continue operating smoothly after an unexpected event. The insurance also reimburses for repair or replacement costs and helps ensure cash flow continues through business income and extra expense coverage if operations are disrupted by a covered loss. The estimated average annual pricing for this type of insurance is $3.50 per $100 of insured property value.
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Based on industry data and risk factors, the estimated average annual pricing for property insurance for businesses in NAICS 423940 is $3.50 per $100 of insured property value. This pricing is derived from the high risk of theft and damage of merchandise due to the nature of precious metals and gemstones handled by these businesses.
Estimated Pricing: $3.50/$100
General Liability Insurance
General liability insurance is an essential protection for businesses in the jewelry industry. It helps shield companies from lawsuits and claims that may arise from injuries on their premises or issues related to the high-value goods they sell and handle.
General liability insurance covers risks inherent in working with expensive precious metals and stones. It protects wholesalers against liability claims if customers’ goods become damaged, lost or stolen while in their care, custody or control. Transportation risks when delivering products are also covered.
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Based on industry research and insurance agent experience, the estimated average annual pricing for general liability insurance for businesses in the Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers with NAICS Code: 423940 Industry is around $2,500 – $5,000 per year. This pricing is derived based on factors such as average sales revenue, number of employees, claims history if any, and safety measures/procedures in place to prevent theft and damage to valuable inventory.
Estimated Pricing: $2,500 – $5,000
Workers’ Compensation Insurance
Workers’ compensation insurance is an important protection for businesses in the jewelry, watch, precious stone, and precious metal wholesalers industry. It provides medical coverage and lost wages for work-related injuries and illnesses, while also shielding companies from liability lawsuits stemming from accidents. Workers’ comp offers many advantages to jewelry wholesalers by protecting both employees and the bottom line. It ensures prompt medical care and wage support after accidents. Just as importantly, it controls replacement and training expenses that result from workplace injuries. Overall, workers’ compensation creates a stable environment for employees to recover and return to their jobs. Workers in this industry often perform manual labor such as cutting, polishing, assembling, and repairing jewelry pieces. They are also exposed to hazards involved with handling valuable and sometimes fragile precious materials. Workers’ compensation insurance helps address the risks of accidental injuries that can occur on the job, such as lacerations from tools, lung diseases from dust exposure, and injuries from lifting or moving heavy inventory.
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Based on industry risk factors and average claims data, the estimated average pricing for workers’ compensation insurance for businesses in the Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers industry is $2.50 per $100 of payroll. This rate is higher than the national average of $1.50 due to the hazardous nature of working with fine jewelry, precious metals and stones. Risks include cuts, burns and exposures to chemicals during manufacturing processes.
Estimated Pricing: $2.50 per $100 of payroll
Product Liability Insurance
Product liability insurance provides essential protection for businesses in the jewelry, watch, precious stone, and precious metal merchant wholesalers industry. This type of insurance covers costs from recalls, lawsuits, and injuries related to defective or dangerous products. It also protects the business reputation and reduces stress from unpredictable lawsuits and recalls. The estimated average annual pricing is around $2,000-$5,000 depending on factors like annual sales revenue and product types handled. Product liability insurance is critical for wholesalers of precious goods to shield them from significant financial costs from unforeseen incidents related to their products.
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Based on industry data, the estimated average annual pricing for product liability insurance for businesses in NAICS Code 423940 is around $2,000-$5,000 per year, depending on factors like annual sales revenue, number of employees, claims history, and product types handled. This pricing was derived from underwriting guidelines focused on merchandise risk for industries dealing with precious metals and stones.
Estimated Pricing: $2,000-$5,000
Business Interruption Insurance
Business interruption insurance provides coverage for businesses if they experience an insured loss that results in a temporary shutdown or loss of business income and revenue. It protects cash flow and helps avoid debt or bankruptcy during periods where normal business operations are disrupted. For jewelry and precious metal wholesalers specifically, business interruption insurance is especially important due to the high-risk nature of their business handling valuable precious metals and gemstones. Common risks for business interruption include property damage from natural disasters, fires, theft, and other incidents that could force a temporary shutdown. Business interruption insurance covers lost income, operating expenses, lost profits, and extra expenses to help businesses restart operations after an insured loss to minimize financial impact.
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Based on the estimated average gross profits of $2-5 million for businesses in this NAICS code and typical business interruption insurance policies covering 12 months, the estimated average annual premium would be around $20,000-30,000. This was calculated using an industry standard rate of 1-1.5% of the sum insured, which is estimated to be the businesses’ gross profits for 12 months.
Estimated Pricing: $20,000-30,000
Conclusion
By maintaining the right mix of property, liability, workers’ compensation and business interruption insurance policies, jewelry and precious metal wholesalers can feel secure knowing their business and employees are protected from unexpected costs of accidents, natural disasters and other incidents inherent to this high-risk industry.