Jewelry store owners conduct a risk analysis to find all risks that could affect the business. The findings show the business owner the best ways to protect the company and its inventory.
Entrepreneurs who want to start a jewelry business should review these top three biggest risks of starting a jewelry business.
1. Theft and Burglary
Theft and burglary are the greatest risks for jewelry store owners. The risks include break-ins where the inventory is stolen while the store is closed. Theft of items from the display cases are another concern and require the workers to pay close attention to customers. Jewelry stores require surveillance systems to track customers inside and around the store. Doorway detectors alert the sales staff if a customer tries to steal jewelry during business hours.
When insuring the store, it is vital for the business owner to get property insurance to cover the inventory stored in the building. Reviewing the value offered through the policy helps the business owner determine if they need more coverage for inventory through additional policies. Higher than average jewelry pieces might require a rider to provide more comprehensive coverage. Jewelry store owners who need more information about property and inventory coverage visit habermaninsurance.com now.
2. Damage or Destruction of Their Inventory
The damage or destruction of the store’s inventory is another serious risk for the jewelry business. Property insurance coverage helps if the inventory is damaged because of covered events. Commercial property insurance coverage applies to fires, natural disasters, and other severe weather that causes property damage. The prevailing weather conditions require the most coverage and protection. For example, business owners need extra coverage for perils in areas where tornadoes occur more frequently.
If the property is inside a designated flood zone, the business owner needs additional flood coverage to protect the inventory. Properties that are in a designated flood zone aren’t covered completely by property coverage. Reviewing the terms of insurance policies help the business owner find an option that gives them adequate coverage for the unexpected.
3. Digital Theft and Security Breaches
Digital theft and security breaches are a serious risk for jewelry businesses that sell high-valued items online. Hackers could find a way into their system and steal customer data and use it for financial gains. Cybercrimes are serious and lead to lawsuits for the business owner if the hacker uses the financial data. Identity theft is the most common cybercrime that leads to significant financial losses for the customers and the business owner.
Cyber liability coverage helps the business owner protect themselves against financial losses if cybercrime occurs. It provides a settlement for the customer if their personal or financial data was stolen or used. The amount of coverage the business owner needs depends on if they sell products online or in their physical store only. The business needs robust security schemes for their business network to prevent hackers from gaining access. If they use an e-commerce website, the business owner faces liabilities if their hosting services don’t provide enough security to prevent customer data loss.
Starting a business requires thorough risk assessments. Determining what risks the business faces shows the owner what type of insurance is best suited for their company. Reviewing the risks and comparing policy terms helps the business owner make well-informed decisions about starting the company and protecting it more effectively.