What the form is
The CM 59 90 09 00, titled "Proposal For Jewelers Block Coverage Form," is not a coverage form itself, but rather a mandatory application or proposal that an insured must complete to obtain Jewelers Block insurance. This detailed questionnaire gathers critical information about the applicant's business operations, exposures, and risk management practices. Crucially, this proposal form becomes an integral part of the Jewelers Block Coverage Form (often CM 00 59) if a policy is issued. Its primary function is to provide underwriters with the necessary data to evaluate the unique risks associated with a jeweler's business, determine appropriate coverage limits for various situations, and calculate an accurate premium.
Classes of business it applies to
This form is specifically designed for businesses in the jewelry industry seeking Jewelers Block coverage. This includes, but is not limited to:
- Retail jewelers
- Wholesale jewelers
- Jewelry manufacturers
- Diamond and gemstone dealers
- Pawnbrokers dealing significantly in jewelry
Real-world example: A high-end retail jewelry store with a large inventory of diamonds, precious metals, and watches, as well as items belonging to customers for repair, would need to complete this proposal to secure Jewelers Block insurance. The form would require details about their display cases, safes, alarm systems, and practices for shipping valuable items.
Special considerations
There are several important considerations when dealing with the CM 59 90:
- Accuracy is paramount: The information provided on this proposal is considered a warranty in some contexts. Misrepresentations, even if unintentional, could potentially void the policy or lead to claim denial. Therefore, it must be completed with utmost care and accuracy.
- Separate proposal per location: A separate proposal form must be completed for each location for which coverage is desired. This allows the insurer to assess the specific risks at each site.
- Basis for limits: The information provided, particularly regarding inventory values and exposures, directly influences the various limits of liability that will be set in the policy declarations. This includes limits for stock at the premises, property in transit, property in vaults, items with other dealers, and other off-premises situations.
- Part of the policy: Unlike many applications, the Jewelers Block Proposal (CM 59 90) is typically incorporated into and becomes a part of the final insurance policy.
Real-world example: If a jeweler understates their maximum inventory value on the proposal to lower their premium, and then suffers a loss exceeding the declared value, the insurer might limit the payout based on the information provided in the CM 59 90, or in severe cases of misrepresentation, deny the claim altogether.
Key information for agents and underwriters
For agents and underwriters, the CM 59 90 is a critical underwriting tool:
- Risk Assessment: It provides a comprehensive overview of the applicant's risk profile, detailing aspects like the nature of their stock (e.g., loose stones, finished pieces, watches), the proportion of their own goods versus goods of others, and their geographic exposures.
- Security Measures: Detailed questions about safes, vaults, alarm systems (type, extent, monitoring), surveillance, and opening/closing procedures are essential for evaluating the physical security of the premises.
- Inventory Control: Information on how inventory is taken and recorded, including the frequency of physical inventories, is vital for understanding the insured's management practices. The insured must typically take a physical inventory at least annually.
- Travel and Off-Premises Exposure: The form will inquire about property taken off-premises by salespeople or for other reasons, including the mode of transit and maximum values typically exposed.
- Loss History: Past losses are a key indicator of future risk, and this proposal will require a detailed loss history.
- Pricing and Deductibles: The completeness and quality of the information provided directly impact the underwriter's ability to price the risk accurately and determine appropriate deductibles and sub-limits.
Real-world example: An underwriter reviewing a CM 59 90 for a jewelry wholesaler might pay close attention to the sections on travel exposures and shipments, as these often represent significant risks. If the proposal indicates frequent high-value shipments without adequate security protocols, the underwriter might require specific endorsements, higher deductibles for transit losses, or even decline coverage.