Topics covered:

Coverage
Exclusions
Limits of Insurance
Deductible
Additional Conditions

Coverage

We will pay for direct physical loss of or damage to Covered Property from any of the Covered Causes of Loss.

1.     Covered Property, as used in this Coverage Form, means:

a.     Your stock in trade consisting of jewelry, precious and semi-precious stones, precious metals and alloys and other stock used in your business;

b.     Such property sold but not yet delivered;

c.     Similar property of others not in the jewelry trade in your care, custody or control; and

d.     Similar property of others in the jewelry trade in your care, custody or control. But we only cover to the extent of money you have advanced or your legal liability for that property.

Analysis

Covered property includes the named insured's stock in trade, consisting of jewelry, precious and semi-precious stones, and precious metals and alloys. It also includes other stock used in the named insured's business, so things like porcelains and crystal in the insured's inventory are covered. The meaning of covered property applies as well to the stock that has been sold but is awaiting delivery.

Moreover, property of others that is similar to the named insured's stock in trade is considered covered property if in the care and custody of the named insured; this applies to those others not in the jewelry trade and to those in the jewelry trade, although the coverage is treated differently for the two groups. For those not in the trade, coverage is viewed in the same light as the stock in trade of the named insured; the insured has the property on consignment for example and it is treated the same as if it is the property of the insured. But, if the property belongs to another jewelry dealer, the coverage is restricted to the amount of the insured's legal liability for the property or to the amount of the insured's investment in the other property. These two concepts are not mutually exclusive; an insured might be liable to another dealer to the extent of $500 on a piece of jewelry to which the insured had added another $200 before the loss occurred. The covered loss is $700.

Note that other categories of property may also be covered by the form but a separate endorsement is required. These other categories are: furniture, fixtures, and office supplies; improvements and betterments; machinery, tools, and fittings; and patterns, dies, molds, and models. Furniture, fixtures, and office supplies and improvements and betterments, when insured, must be covered for their full actual cash value; the other items must be insured for at least 80% of their total value. See Commercial Inland Marine Endorsements for comments on the standard endorsement, CM 99 01 09 00.