Last updateWed, 25 Mar 2020 1pm

The Best Policy: Two characters that make a difference

Once the alarm system was disabled, the three burglars had virtual free rein of the jewelry store.  Even though they had entered from the roof, they now could open the back door to bring in the heavy tools they would need to attack the safe.

The safe was large and weighty; it held a great deal of merchandise as well as two boxes of customers’ repair items, and also several diamonds which the jeweler had recently received on memo.  The safe was “UL Certified” for burglary resistance.

The thieves were professional.  They were not deterred by the fact that the safe was boxed in by walls and equipment, nor that it was very heavy.  They soon had equipment pushed aside and the safe in a clear space where they could work on it.  Knowing that the door was the most protected part of the safe, they torched, sawed, and chipped their way through the side wall of the massive unit until they had created an opening large enough to reach through and tip the shelves.  This caused all of the contents to tumble to the bottom of the safe where they could be scooped out.

Time was not a factor.  With patience and skill, the criminals were able to take away virtually everything that had been in the safe – inventory, repairs, even memo diamonds.

The loss was not discovered until jeweler Tanza Knight went to open her store a day later.  The store was a mess – and even though the thieves had left some of the tools behind (a taunting “tradition” among some safecrackers), they were long gone and far away.  The next call Tanza made was to her insurance company.

An insurance adjuster was sent to examine the loss – which included a close inspection of the safe, as well as the Jewelers Block policy and its application.  The Underwriters Laboratory rating on the door of the safe identified it as:  “TL-30.”

The insurance policy showed the correct brand name for the safe and that it was UL rated, but the rating designation was slightly different.  It stated:  “TL-30 x 6.”  It was a difference of just two characters, an “x” and a “6.”  “Is that important?” Tanza asked the adjuster, who said he wasn’t sure.

As it turned out, the difference of two characters wasn’t just important, it was critical.

Insurance companies compare a jeweler’s level of inventory (considered the exposure) with the jeweler’s safe and alarm system.  An exposure of two or three hundred thousand dollars might warrant a safe rated at one level of security, while for an inventory of $1,000,000 or more the carrier would require a higher rated safe.

The rating attests to the particular testing regimen to which the safe model was submitted.  In each of these two tests, ordinary hand tools are used in an attempt to create an opening within the time allotted for the test.  However for an “x 6” test additional tools and more power are permitted.

But this is not the most important difference.

In a TL-30 test, UL technicians attack the door of the safe and framing around it.  For any “x 6” test, the entire safe is subject to attack.  Technicians attack the sides, back, and top – then even drop it over so that they can work on the bottom of the unit.  If the safe fails in any one of the attempts, it fails the entire test and cannot be given the rating.

In spite of being correctly identified by name, the safe in Tanza’s insurance policy was very different from the one that was on her insurance application.  And because the difference was pertinent to the claim, her insurance coverage for the entire loss was in jeopardy.

The insurance company’s position for declination was two-fold:

#1    Had the company underwriter known that the safe was a TL-30 and not a TL-30 x 6, Tanza Knight’s inventory was such that they would have elected to not issue the policy – or alternatively would have required her to upgrade her safe before providing burglary coverage.

#2    If Tanza had had the safe that was indicated in the application, this burglary and its form of attack would likely have been unsuccessful.  In other words – there would have been no loss of merchandise.

Tanza wasn’t certain of the reason for the error or who had made it; in fact, the misinformation appeared to have been on the application for many years.  It was a case of a sleeping mouse of a misstatement becoming a raging elephant at the time of loss.

“The insurance company had years to find out that my safe designation was wrong,” was Tanza’s response, but insurance companies do not routinely perform on-site inspections of every account.  Instead, their underwriting decisions rely on the information that is furnished to them by the jeweler and/or the agent.

The lesson for all jewelers is just this:  don’t take unnecessary chances with your insurance -  check your policy and application for accurate safe and alarm information.

UL Burglary Ratings for Safes

Underwriters Laboratories tests safe models and makes rating designations based on forms of attack, time length of the test, and whether or not the entire safe was tested.  The ratings use the following keys to describe the test:

TL = Tools – common hand tools

TR = Torch – an oxyacetylene welder’s torch

15, 30, 60 = minutes designation of the test, under clinical conditions.

X 6 = All six surfaces of the safe were tested (without “x 6,” only a door test).

UL safe ratings of 1, 2, or 4 hours are indications of a fire-rated safe, not a burglary safe.

Bob Carroll is a Certified Insurance Counselor and owner of Robert G. Carroll and Associates – an independent agent who has specialized in insurance for the jewelry industry for more than 30 years.  He represents Jewelers Mutual and other carriers in OK, AR, TN, and MS.  “Jewelry insurance isn’t just what we do – it’s all we do!”