A jewellery firm in India has been hit by a double whammy, with a courier making off with its precious wares and the firm later learning that its jeweller’s block insurance policy did not cover the incident.
Earlier this month, the jewellery company reported that an official of a logistics company ran away with 11 kilograms of gold jewellery worth INR35 million (around US$504,000). According to an Economic Times report, the jeweller’s insurance claim was denied, because the policy did not have a clause for “infidelity” – or dishonesty by logistics companies. The policy also did not cover gross negligence of couriers, loss due to unattended vehicles, and mysterious disappearance of goods.
While police were able to recover 10 out of the 11 kilograms of stolen jewellery, the denial of the insurance claim came as a shock to the Indian jewellery trade.
“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,” said Bhavesh Kataria of Kataria Jewellery Insurance, a leading insurance broker for the trade.
According to Kataria, to cover such situations logistics companies should have fidelity policies for their employees, or jewellers can take out a third-party fidelity policy that covers logistics companies, goldsmiths, and other parties that come in contact with their goods. In case of loss caused by negligence of the courier, such as disappearance from an unattended vehicle, the only option is that the logistics company must have a legal liability insurance policy.
Upon learning this, Surendra Mehta, national secretary of the India Bullion & Jewellers Association, said that, from now on, jewellers will insist that logistics companies take out such insurance policies before transacting with them to deliver goods to exhibitions or transfer them between branches.
