Large-scale thefts of high-value property are not limited to museums. Business owners are encouraged to review their insurance policies, confirm coverage for theft, and ensure that any security requirements in the policy are being met. (Credit: GVictoria/Adobe Stock)
The jewelry heist at the Louvre Museum in Paris captured global attention after thieves stole pieces valued at more than $100 million from the historic landmark on Oct. 19. As of publication, four suspects had been charged in the case, but the stolen jewels — including pieces once belonging to Empress Eugénie — remained missing.
The jewelry was not insured, according to The New York Times. The French government, which owns the museum and its permanent collections, acts as its own insurer because private coverage for so many “priceless” works would be too expensive, potentially costing billions per year, the publication noted.
“Most of these items would not be replaceable,” says Patricia Sheridan, managing director of Burns & Wilcox in Toronto, Ontario. “The government relied on security measures to safeguard the jewels while self-insuring.”
While the Louvre’s historic jewels may be a rare exception, most property can be protected under a commercial property insurance policy that includes coverage for theft, says Seth White, commercial insurance manager at Burns & Wilcox in Ruston, Louisiana.
“The Louvre’s jewels are such a historical artifact that it is hard to put a price tag on them, but 99.9% of all things can be insured and are not ‘priceless’ material,” he says. “If you have a building, inventory, or equipment, we can put a price tag on that. Do not be discouraged by thinking carriers do not want to help.”
The risk of ‘self-insuring’
Large-scale thefts of high-value property are not limited to museums. In 2022, thieves stole an estimated $100 million in jewelry, gold and luxury watches from an armored car in California, marking what officials called the largest jewelry heist in U.S. history. Seven individuals were charged in connection with the crime, NBC has reported.
Earlier this year, luxury handbags worth millions of dollars were stolen in Paris in a series of robberies targeting boutiques and brand headquarters, The Guardian reported in August. Even lesser-valued goods can lead to significant losses for small businesses when a theft occurs, like earlier this year when boxes containing $30,000 of Labubu dolls were stolen from a warehouse in California.
Without commercial property insurance that includes coverage for theft, many private businesses could not withstand a loss of this scale. The same applies to other property losses typically covered by the policy, such as fire or wind damage.
“You have insurance for the one-off situations nobody would expect. I would encourage everybody to have it,” White says. “If you ‘self-insure’ a $1 million office building because you do not want to pay the premium, all it takes is a lightning storm to hit, it catches fire, and the whole building is gone. Now you are out $1 million, and you cannot rebuild because you were not insured. That is the risk you take when you ‘self-insure.’”
As with any type of insurance, “you hope you never use it, but if something happens, it is there to protect you and get you back on your feet,” White added.
According to Sheridan, self-insuring may be seen as an option by those in a financial position to “absorb” a large loss, assuming they do not have a loan, lease, or mortgage requiring them to carry insurance. “Without insurance, the cost to recover from a theft can definitely be high, which can be detrimental to the point of bankruptcy,” Sheridan says.
What commercial property insurance can cover
An increase in organized retail theft continues to drive major losses for businesses of all sizes. According to the U.S. Chamber of Commerce, organized retail crime cost retailers an average of more than $700,000 per $1 billion in sales in 2020, representing a 50% increase over the previous five years.
In August, authorities arrested 14 individuals suspected of being tied to a massive retail theft operation that included 600 thefts at 71 Home Depot locations, exceeding $10 million in losses.
Higher-value items and those in greater demand, such as electronics and e-cigarettes, may be more likely to be targeted for retail theft, Sheridan says. “Businesses selling those types of items would definitely want to make sure that they have proper insurance coverage in place,” she adds.
Commercial Property Insurance policies do not always include coverage for theft. When theft is covered, “a majority of insurance carriers will require a central station burglar alarm to be in place,” White explains.
The policy can also help pay for physical damage done to a building during a theft. “Even outside of the actual stock itself being stolen, there can be damage to buildings and displays,” says Sheridan, noting that these costs often add up quickly. “A business owner could end up not only needing to replace $100,000 worth of stock, but there could be thousands of dollars in damages done to the building as well. There is a lot to take into consideration if they are thinking of self-insuring.”
Jewelry stores may require an additional policy known as Jewelers Block Insurance to ensure that their inventory is properly protected, as a standard Commercial Property Insurance policy may only include a small sublimit for stolen jewelry, Sheridan says. “That would not give them sufficient coverage in a theft loss."
Reviewing coverage and safeguards
Business owners are encouraged to review their insurance policies, confirm coverage for theft, and ensure that any security requirements in the policy are being met. Small businesses, in particular, should understand their coverage for theft and the risks of going without insurance.
“Everybody thinks, ‘Oh, it will not happen to me,’” White says. “They might take the chance of not insuring things, but there is always the chance that it will happen to you. Unfortunately, sometimes it does.”
Policy terms and conditions should be read thoroughly, Sheridan added. “There could be coverage for theft, for example, but there may be terms and conditions where if they are not adhered to, the coverage might not respond,” she says. “It is really important to understand the wordings and the terms and conditions and make sure you are upholding them.”
This article first published on the Burns & Wilcox website and is reproduced here with permission.
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