The Insurance Implications of The Dangerous Substances and Preparations (Nickel) (Safety) Regulations 2000

Complaints against Jewellers for dermatitis caused directly by nickel, or by defective plating, are relatively rare. Indeed, complaints about ear-piercing are more likely to involve infections caused by the customer's own poor post-operative care. For the most part, though the problem caused can be painful and disfiguring, it is usually minor in comparison with many other causes of personal injury. Any compensation payable for a single incident is therefore often small, and in our increasingly litigious society the main expense to the Jeweller can be the legal fees involved in a dispute. However, in a serious case e.g. for a bank clerk handling coins, sensitivity caused by nickel in jewellery could force a customer to seek alternative employment.

Ultimate liability for a defective product rests with the manufacturer or importer but all Jewellers, including retailers, should have the protection of products liability insurance. It is not expensive and covers both the legal costs of defending an action, if appropriate, and the jeweller's legal liability to pay compensation or the customer's legal fees. Many Jewellers who insure Public Liability as part of a Block policy will already be covered.

A more difficult decision, which should be discussed with your brokers, is the level of cover required. The limit of indemnity for Products Liability is the maximum total that the insurer will pay for all incidents arising in any one year. In the United Kingdom £1,000,000 is often regarded as the absolute minimum cover, but it is not possible to state a figure that would cover the most extreme circumstances. Manufacturers and importers who could be subject to many claims from a defective batch should consider higher limits.

Products Liability does not cover the cost of recalling or repairing defective items, nor will it cover a situation in which a Jeweller intentionally disregards the Regulations.