Types of Coverage We Offer

KEYS FOR COVERAGE
UNDERWRITING REQUIREMENTS
PROPERTY COVERAGES
LIABILITY COVERAGES
OPTIONAL COVERAGES
POLICY DEFINITIONS

Pawnbrokers Insurance Program

OVERVIEW:

PACKAGE POLICY – Format is a business owner’s policy, combining a variety of coverages into a singular form.

KEYS FOR COVERAGE:

  1. ACCURATE RECORDS must be kept for three years.
  2. ADEQUATE PROTECTION/SAFEGUARDS – Central Station alarm system must be in operation.
  3. WARRANTIES – Central station alarm system in place and inventory storage; the application becomes part of the policy.

UNDERWRITING REQUIREMENTS:

  1. Must have a minimum of THREE YEARS EXPERIENCE in pawnbroking or similar business. (Manager of Pawnshop, Jeweler, etc.)
  2. Central station ALARM SYSTEM in operation on premises. (An alarm certificate may be required upon binding coverage.)
  3. Must have adequate SAFE PROTECTION for firearms & jewelry. A minimum of 70% of the firearms and jewelry must be stored in safe(s) at close of business. (Some exceptions are considered for long guns – provided they are properly secured.)

PROPERTY COVERAGES:

  1. Building
  2. Business Personal Property (furniture and fixtures) – contents other than stock inventory.
  3. Tenants Improvements and Betterment’s – permanent changes. Tenants improvements and betterment’s are fixtures, alterations, installations or additions.
  • Made a part of the building and structure you occupy, but do not own; and
  • You acquired or made at your own expense but cannot legally remove.

4.  Inventory – Pledged (pawned) and Unpledged (owned) items.Coverage is written on a “Special Form” basis including fire, lightning damage, theft and wind/hail damage, subject to the policy and State exclusions.

  • Specific exclusions include; earthquake, pollution, flood, employee dishonesty and mysterious disappearance. (Please refer to the original policy.)
  • Deductibles vary. (The minimum policy deductible is $500 — Firearms and Jewelry section has a minimum deductible of $1,000.)
  • Coverage is available for buildings, business personal property (furniture & fixtures), and tenants improvements & betterments on a replacement cost basis. (This means without penalty for depreciation.)
  • Actual Cash Value may be selected and/or required on the building and business personal property coverage section depending on the age of the building. (All updates must be within the last 15 years on buildings over 25 years old in order to provide replacement cost coverage.) Stock Inventory – “Pledged” (pawned) and “Unpledged” (owned) items including:
  • Your stock in trade consisting of jewelry, precious and semi-precious stones, precious metals and alloys, watches, electronics, firearms, musical instruments, and other “unpledged” stock used in your business.
    • Such property sold but not yet delivered;
    • Similar “pledged” property of others not in the pawnbroking trade in your care, custody or control; and
    • Similar “pledged” property of others in the pawnbroking trade in your care, custody or control. But, we only cover to the extent of the money you have advanced or your legal liability for that property.

5.  Business Income – written on a monthly limitations form. Monthly limitations available: 1/3, 1/4 or 1/6. Extended period of indemnity up to 360 days also available.

Property Coverage Extensions INCLUDED AUTOMATICALLY: (Many can be increased for an additional premium)

  • Accounts Receivable $50,000
  • Business Personal Property Off Premises $25,000
  • Dealer/Memoing $5,000
  • Fire Department Service Charge $10,000
  • Fire Extinguisher Recharge $5,000
  • Forgery and Alteration $25,000
  • Money Orders and Counterfeit Paper $10,000
  • False Pretense $25,000
  • Inventory Off Premises $2,500
  • Newly Acquired or Constructed Personal Property $250,000
  • Newly Acquired or Constructed Building $500,000
  • Outdoor Signs $5,000
  • Money inside $5,000
  • Money outside $5,000
  • Sewer Backup $25,000
  • Outdoor Property named peril $10,000
  • Registered Mail (excess) $50,000
  • All other Shipments (excess) $25,000
  • Show Windows at close of business $2,500
  • Valuable Papers $100,000
  • Fund Transfer Fraud $10,000
  • Consequential Loss $10,000
  • Key Replacement/Lock Repair $10,000
  • Personal Effects $25,000
  • Reward $25,000
  • And more…

LIABILITY COVERAGES:

LIMITS AVAILABLE – $300,000/$600,000, $500,000/$1,000,000, and $1,000,000/$2,000,000. (Standard Exclusions apply)

  1. WHO IS AN INSURED?
  • Individual – you/spouse
  • Partner – partner & spouse – only with respect to the business.
  • Corporation – you, executive officers, directors – only in the business.
  • Employees under scope of employment.
  1. Protects against claims made against insured for BODILY INJURY OR PROPERTY DAMAGE due to: Premises/operations – being on your property Products – items purchased from insured (excludes firearms)
  2. Protects against claims made against you for PERSONAL INJURY OR ADVERTISING INJURY – slander, libel violation of right of privacy, infringement of copyright. (There is no coverage for false advertising.)
  3. PRODUCT LIABILITY FOR FIREARMS – may be purchased up to a $1,000,000 per occurrence limit. (Defense costs are outside limit provided — firearms sales must be 30% or less than overall gross sales.) No gun-smithing.
  4. HIRED AND NON OWNED AUTO – Protects against claims arising out of the use of vehicles leased, hired, rented or borrowed by you, or your employees, while in the course of business. Also provides liability protection for autos used in business that are not owned, leased, hired, rented or borrowed.
  5. MEDICAL EXPENSE – regardless of fault, accident on your premises, $5,000 limit, not for injuries on your employees. (This is a goodwill coverage.)
  6. FIRE LEGAL LIABILITY – $100,000 limit, property damage to premises not owned by you as a result of fire or explosions. (Higher limits may be purchased for an additional premium, if needed.)
  7. EXCESS LIABILITY up to a $5,000,000 occurrence limit available. (Certain states may not be eligible.)
  8. WORKER’S COMPENSATION, pollution and auto liability NOT COVERED.
  9.  CYBER LIABILITY Cyber (Data Compromise) Liability –  Data compromise coverage is an innovative product designed to help small and midsize businesses respond to data breaches and can offer identity theft recovery for designated executives of an insured organization.
  10. EMPLOYMENT PRACTICES LIABILITY A type of liability insurance covering wrongful acts arising from the employment process. The most frequent types of claims covered under such policies include: wrongful termination, discrimination, sexual harassment, and retaliation.
  11. Employee Benefits Liability – Pays on behalf of the insured damages (as defined) on account of any claim made against the Insured for any Wrongful Act – breach of fiduciary duty which includes any negligent act, error or omission in the “administration” of employee benefit plans

Some of the other OPTIONAL Coverages available:

  • Business computers – Hardware and data
  • Equipment Breakdown
  • Ordinance or Law
  • Employee Benefits Liability
  • Cyber (data compromise)
  • Employment Practices Liability (EPLI)
  • Hired and non-owned automobile coverage
  • Firearms Product Liability
  • Employee Dishonesty
  • Auto Pawn

STANDARD POLICY DEFINITIONS: (some may not be applicable)

  • ACTUAL CASH VALUE (ACV)” The present day value of property measured in cash, determined by deducting depreciation brought about by physical wear and tear and obsolescence from “replacement cost”.
  • REPLACEMENT COST (RC)” The amount needed to cover the actual amount of repairs or replacement without deduction for depreciation.
  • BUSINESS PERSONAL PROPERTY (FURNITURE & FIXTURES)” Contents owned by the pawnbroker and that are used in your business other than “pledged” and “unpledged” inventory.
  • INVENTORY VALUE” The value of goods as normally accepted within the pawnbroking business as evidenced by the amount declared on the inventory, stock books, stock papers, lists, pawn tickets or loan agreements maintained by the pawnbroker.
  • PLEDGED” Pawned goods or items taken in on loan being as a collateral.
  • UNPLEDGED” Items or inventory owned by the pawnbroker for sale, other than business personal property (furniture & fixtures).
  • COINSURANCE” A property insurance provision that penalizes the insured for not purchasing a limit of insurance at least equal to a specified percentage (commonly 80 percent) of the value of the insured property. The coinsurance provision stipulates that the insured will recover no more than the following: the amount of insurance purchased (the limit of insurance) divided by the amount of insurance required (the value of the property on the date of loss multiplied by the coinsurance percentage), less the deductible. For example: Covered property worth $100,000 may require a minimum of 80%, or $80,000, of coverage for compliance with the policy’s coinsurance requirement. If only $60,000 is carried (25% less than the required $80,000), then any loss payment would be reduced by 25%.

Questions? Call or Email us!

ASK FOR Seth, Laura, Russ, or Dave
Toll-free (800) 545-5624
Union Life & Casualty Insurance Agency
5225 N. Central Avenue, Suite #110
Phoenix AZ 85012
Phone (602) 277-5555
Fax (602) 265-9763