How do you deal with high value stones?

Jewelry Discussion
1

Hi Everyone, I took a custom job yesterday to do a simple bezel set
ring with my customers very high value stone. I called my insurance
company and bought a 2 week rider so it is covered while in my store
but how do you tell your customer that you cant take any personal
responsibility for the actual setting done. The actual profits to be
made on a job like this don’t seem to justify the risk of setting it
but its not a stone with much risk involved either. I would love to
be the designer that can handle these types of stones as I know this
is just the first stone that I may get the opportunity to work with
through this client… but I want to make sure I am covered legally
and respond to her professionally.

I know I could turn the job down but this is not the answer I’m
hoping for. How does everyone else cover their tails and protect
themselves while doing the elite few a grand service?

T Lee
T Lee Fine Designer Jewelry

2

T I had a jeweler friend of mine tell me recently he cracked a four
carat round brilliant diamond. It was cut for the client and was a
vvs stone. He had to take a second out on his house. The jewelry
store he does work for split the cost but it was still somewhere in
the $28,000 range and that was his half. I have a price list that
states that the jeweler is not responsible for heavily included,
chipped or fractured diamonds or colored stones. The sales staff is
supposed to show it to customers when a stone comes in like that.
Tonight I set a one carat in a new head and it had an inclusion that
looked like it could cleave. I had the manager of the store loupe it
and release me from any responsibility if it did cleave. I have had
one carat stone cleave after I was released. Luckily I do a bunch of
trade work so the home office will take it no problem unless you are
not released then they try to rip you. I do work for antique jewelry
stores and regularly have the customer sign a waiver written on the
repair envelope releasing me of any responsibility in the event that
the stone or piece is damaged. Have never had a customer have a
problem with it. Loupe, Loupe, Loupe. Oh and did I mention the
loupe? Be aware of all flaws in the stone. How is it cut? How is it
going to be set? Bezel, prong, glue? Is the girdle thin? Will I be
hammering on it? Is my skill level adequate to deal with this
project? Even if your skill level is beyond believe there is always a
chance that you will have a bad experience. That is why it is very
important to C.Y.A. or COVER YOU’RE A#$%. If the customer does not
want to release you from responsibility and you do not feel
comfortable working on the piece let them walk.
Regards J Morley Coyote Ridge Studio

3

We are quite open about working on any stone in which there is an
element of risk. We always tell the customers that while their stone
is covered against theft by our insurance company we will work on
them only at their risk. We also ask them to sign our order form
which clearly states that the stone is worked on at their risk. In
all honesty, if something did happen to the stone, they could still
probably sue us (claiming negligence or something similar) but at
least it gives us some form of understanding. Also, it isn’t only the
high value stones that are a problem. It should be a concern of
yours with all of the stones people bring in to work on. Actually it
is often the ones with the junk that will make the most stink if
something happens. It all comes back to this: Make sure you have
the resources to cover yourself no matter what happens.

Daniel R. Spirer, GG
Spirer Somes Jewelers
1794 Massachusetts Ave
Cambridge, MA 02140
617-491-6000
@spirersomes
www.spirersomes.com

4

Great topic for discussion. I’ll be interested to see how others
respond to this as setting high-value gems is a regular part of my
business.

First, I have a list of shop policies posted conspicuously on the
wall near my consultation counter and one of my policies states: Any
gem other than ours will be set at CUSTOMER=92S RISK ONLY unless
otherwise detailed in writing and signed and dated by both a
representative of Goldworks and the client. Stone setting insurance
can be provided and is advised in the case of valued items.

I also have a “disclaimer” on my job envelopes that refers clients
to the policy statement.

That being said, in most cases, if we damage a gem, we replace
it…it’s a matter of maintaining the good-will of our clients and
that good-will is of more high-value to me than the value of most
gems. I need them to return with more business or I don’t survive.

But…when I take a particularly valuable job in, or sell a very
high-value gemstone, I normally go over the characteristics of that
particular gem with my client PRIOR to accepting the job and, if the
situation warrants (in the case of opals, emeralds or gems with
potentially fatal inclusions, I will verbally point out the policy
and make the client very aware of the potential for disaster and
where liability lies. I do emphasize that I’ve been in business for
nearly 30 years, and will take every precaution to protect a gem
while in my possession but that damage does occur occasionally.

Here’s an in-progress anecdote that pertains to the topic. I made a
ring for an emerald that came back after 5 or so years for a sizing.
The client had not purchased the emerald from me but over the years
became my very best client, allowing me to find other high-value gems
and exercise much creativity in ensuing projects…When the emerald
seemingly self-destructed in the process of sizing, (we had it
submerged in water during the heat phase of sizing and my shop
manager was handling it with kid gloves while polishing)I told my
client, “If this had been anyone else, I would have passed on the
liability since the emerald seemed to self-destruct, but you are my
very best client, I will cover the loss.” The client thought about
it for a minute and replied, “I guess that’s why I have you do
appraisals and have insurance, we’ll let the insurance company worry
about it.”

And so, this time I lucked out, his insurance will reimburse me for
finding another gem. Out of all this long explanation, I guess I
haven’t given you a nice, short, definitive answer, but the emotional
content of what we do doesn’t always lead to nicely packaged
resolutions. Each case must sometimes be evaluated separately and
appropriate action taken for the situation. I think the main point
I’d make is HAVE a firm policy, and discuss the potentials with your
client, up-front. G

— Gary Dawson
— Goldworks Jewelry Art Studio
—Quality and Integrity…Always!
— @Gary_Dawson1

5

T Lee I recently put a small chip on the girdle of a 1.234ct vvs1 e
color princess cut diamond that was also perfectly square. The
customer had bought it online and I was commissioned to make a
custom platinum engagement ring. I had not warned him about the
dangers of setting a diamond after all it is diamond and I do have a
good track record. Damn, that was a hard phone call to make.

The approach I took was to explain that I would be more than willing
to do whatever it took to correct the problem. The first step was to
have the stone recut. The second was to send it back to GIA to have
a new cert worked up.

Now the negotiations started. Would this customer demand a new
stone, or, would they accept a discount on the project equal to the
change in the value of the stone? In this case the decision was that
the discount would be accepted unless the stone was no longer
square. This worked out great for me. It was a very pretty stone and
it would have been easy to sell but still I would rather not fork
out the cash.

As it turned out the recut only lost .003ct bringing the stone to a
1.231ct. Technically it didn’t loose a point. David Wright a local
diamond cutter did a fabulous job and complimented me on my ability
to chip a diamond. I wasn’t flattered. If this had happened to a
larger stone or if the chip had been severe I would have been in
trouble. Lesson learned, always tell the customer of the risks
involved when setting expensive stones.

In fact I have seen one situation where an informed customer who’s
pricy stone was damaged during a repair was willing to wear the
stone home and make a claim with their insurance company. This
solution probably involves legal or ethical questions that I have no
idea how to answer but it may be worth a try if the customer is
generous.

Finally, Working on jewelry involves risks. Life involves risks.
Very often the greater the risk the greater the return. Make it
worth the risk and by all means if you are not comfortable with a
project, don’t turn it away, farm it out to someone more experienced
in that particular aspect of the trade.

John Sholl
Littleton, CO

6

N.E.B.S. has a repair envelope / work order available which has a
disclaimer printed on it, for you to have your customer sign. Go
to: www.nebs.com The item # is 764T.

MY disclaimer: no connection, etc., etc

David Barzilay, Lord of the Rings

7

I used to work at a place that made me pay 100% for broken stones,
not only was that totally unfair but who gets the profits? Not you
or I, of coarse it’s the guy who shoves the money in his pocket, I
absolulty refuse to be responsible for stones. unless it is a
totally blunderous mistake, how can you be sure it is not the stone?
I have set thousands of stones and have broke my share, but my
experience goes far enuff that I can set what my experience has
done. Beyond that…I make a disclaimer if not sure… Paying for
broken stones should be the stores responsibility and if that value
is way high explain your requirements. After all, what other job in
this world makes you take out a morgage to keep your job? if a
casting gets blown who pays? Again the jeweler…why do we do this?
if ya work for another, It’s their name to fame! We are just a peon,
otherwise I would have my health back and not be dying from cancer
caused by careless business owners… All would know my name for the
20,000+ pieces I have worked on in my life… and thats life…
Ringman

8

As a diamond setter for the past 45+years (and counting), I always
loupe a large diamond in the presence of the trade-customer/client. I
will always look for something that is not going to be affected by my
setting techniques. I will insist that he “must see” any inclusion in
a genuine Emerald/Diamond or any other genuine expensive stone.

If he does not assume any responsibility, I walk!!! I once spent 1.5
hours to bezel-set a 5.25carat Emerald, one hour to cut the bearing,
and another 1/2 hour to set it. It had a large inclusion just under
the point of this Pear shape stone. He saw it, I was happy. It was
set, just very carefully ! this stone had an estimate value of
$15,000. LOUPE the darn stones, advise and assume NO RESPONSIBILITY !
no one should pay for a defective stone in the first place, if it was
set by ‘us’…

“Gerry, the Cyber-Setter !”
“www.gemzdiamondsetting.com”
North America, toll free:1-877-850-0003
Member of: CJA, Polygon, JDN
Contributing writer to the American
“BENCH” trade magazine.

9

Hi, Check with your insurance and read the small print. In the UK it
is not unsual to find (often too late!) that a jeweler is covered if
something is stolen or there is an accident - ie he/she drops the
emerald on the floor and treads on it and cracks the stone - but
there is no cover if the damage is the result of working processes -
ie he/she presses a prong down too hard and cracks the stone.

You can of course stick in various disclaimers when you accept the
job (and ensure the customer agrees to them in writing) but this can
scare off customers and you would still often be liable if there was
any hint of negligence (which a court might see as including lack of
experience doing such work).

Good luck Jack Ogden

Irrelevant historical aside:

The whole problem of a ‘poor’ jeweler’s liabilities when working on
expensive objects is not new. A contract survives dated 13th April
AD 588 in which a sub-contracting goldsmith Aurelius Serenus agreed
to work for the goldsmith Theodorus in the city of Oxyrhynchus in
Egypt. The contract notes that he was to work without ‘blame or
hesitation or condemnation’. My guess is that this relates to a
passage in Roman Law where it is noted that contracts for craftsmen
working fragile or otherwise potentially problematic materials, could
expressly exclude liability.

Hope Aurelius Serenus’ contract worked out - reading the small print
wasn’t an option for him, he is described as ‘illiterate’ (so even
if Orchid had been around then …)

10

We have a form in duplicate that states that while we are experts in
the field, things can happen beyond our control and therefore we are
not responsible for any damage that may occur when un setting or
resetting a gem that has not been purchased from us. When
presenting this form to the customer to sign, I simply tell them
that if I didn’t originally set this gem, I don’t know what may be
hidden beneath a prong or bezel that could potentially create a
problem. Most customers haven’t had a problem with this. -BK in AK

11

Ringman, I agree with some of your comments but just an insight into
"the rest of the world". You comments " After all, what other job in
this world makes you take out a morgage to keep your job? if a
casting gets blown who pays? Again the jeweler…why do we do this?
if ya work for another, It’s their name to fame! We are just a peon.
." is what i want to respond to. My cousin is a stock broker and the
standard in that business is a follows: "if the client fails to pay
for a trade then the broker, not the firm is reponsible to pay. the
position is closed out and if there is a shortfall, the broker has
top pay the brokerage firm the difference. if the is a profit, the
brokerage keeps it. hows that for an unfair situation. at least when
we brake a stone, we are braking the stone. Maybe we sold the stone
to the customer, maybe they brought it in themselves . Either way,
our actions make us somewhat culpable. Now, I agree whole heartily
that the firm the jeweler works for has to take the majority of hit
on a loss like this, after all they generally don’t hand out extra
bonuses whenever that worker was especially profitable for them, why
should they penalize them when the become costly. But we do live in a
world where most of us see our world a little rosier than everyone
elses. Andrew Goodell

12

Now lets get this straight, We should not pay umpteen thousands of
dollars for a broken diamond…There was a court case in the States,
where a jeweller by accident broke a very large diamond. The bench
jeweller was taken to court by the store owner…:>( no one should be
totally responsible for the loss! The Judge asked the jeweller:

1) did YOU brake the diamond..Yes!
2) did the store owner pay you for setting the stone..Yes!
3) how much was the diamond...$??,???.00 and how much did he pay

you…$ (little).00

“So because he paid you so little and he thinks that YOU should pay
for this item. Is ‘guy’ for real?..Case Dismissed”…Gerry!