Insurance and Liability for Client-Supplied Stones

Taking possession of a client's stone, even briefly for setting, makes you legally a bailee — responsible for returning it in the condition you received it. That responsibility exists whether or not your insurance actually covers it.

What "bailment" actually means for you

When a business regularly takes possession of customer property for work, it holds that property "in bailment," and the business (the bailee) is responsible for returning it to the customer (the bailor) in at least the condition it was received. This is a real legal obligation, not just good customer service — and it applies from the moment the stone is in your care, not just while it's actively being worked on.

Standard business insurance often doesn't cover this

General jewellers block insurance covers your own stock and equipment; it does not automatically extend to property belonging to someone else that happens to be on your premises. The specific coverage you need is usually called bailee's customers insurance (or "property of others" / "bailee" coverage) — confirm explicitly with your insurer that your policy includes this, rather than assuming standard jewellers block coverage extends to client-supplied stones.

Reasonable care and documentation matter to your coverage, not just to the client

Insurers generally require that you take reasonable, demonstrable care of customer property, and a lack of documentation or evident neglect can reduce or void a claim. This is a direct, practical reason the intake process in our what-to-check guide matters beyond good practice — it's also what supports a claim if something does go wrong.

What to confirm with your insurer specifically

• That bailee's/property-of-others coverage is explicitly included, not assumed.
• Coverage limits relative to the value of stones you actually handle — a policy sized for your average repair job may not cover a significant loose diamond passing through for setting.
• Whether coverage applies in transit, if stones ever leave your premises (sent to a third-party setter, for instance) as well as on-site.

Related reading

• What to check before setting a client-supplied diamond
• How to price setting-only work for client-supplied stones
• Building a client-sourced-stone service into your business

Sources: bailment obligations and bailee's coverage per trade insurance guidance (InsZone Insurance, Risk Placement Services, FoCoIns).