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Stone setting liability

Hello all,

I recently met with a company that wants me to become an “approved
vendor” for custom work. The company is trying to market more to an
upscale clientele and need a bench jeweler who can do custom
manufacturing. One of the sticky points is in stone liability while
setting. They want me to be responsible for any damage that may
occur to stones. Normally I will replace a stone that is small if I
break it while setting. It is such a rare occurrence that it doesn’t
bother me. I have never had a jeweler ask me to be responsible for
replacing broken stones. The other option is that I would be
responsible for the difference between the original cost of the stone
and the value of the stone after it had been repaired. I had assumed
that it was standard knowledge that it was the retailers
responsibility to let the customer know that damage was not the
liability of the retailer.

So, my question is, what are other bench jewelers doing as far as
liability is concerned. My gut tells me to let the store know that
it is their responsibility to deal with the liability. After all I
don’t charge that much to set stones. Even if I only have a problem
with 1/2 a percentage of the stones I set, if the one that chips is a
2.50ct pear shape diamond I don’t want to be out a couple of years of
diamond setting charges to pay for the difference in value between a
2.5 ct and a recut stone or, God forbid, a new stone altogether!

The other thing I was considering was significantly upping the price
I charge for stone setting. I’ll have them send me a value of the
stones that they want me to set and then charge them a percentage of
the value, say 2 or 3 percent of the wholesale cost above what I
normally charge to set the stone.

Am I out in left field with this? I know that the stone setters they
have on premises are awful. I have already done work to reset stones
and rework pieces that they have butchered. Perhaps they are just
gun shy because of the experience they have had with their own
people. Still, I would like to get some feedback on this issue.

Larry Seiger

Hello Larry,

I think that this company wants to take to much benefit from you.
I think that this company wants to do monkey bussines with you and
I think that you should say by-by to this kind of people.

But ....... this is what I think and I'm not you !

Regards Pedro

I found your letter very interesting. It seems to me that if this
company is appealing to an up scale clientele they can easily afford
insurance to cover any stone setting. Most of the higher end stores
in places like Dallas have insurance for this very reason. I agree
that your need to cover the costs on your end should increase your
rate. It is only fair. Also, this company may have had some rough
experiences in the past and this is their way to adjust. Possibly a
suggested period of time that proves your worth so that this company
can become use to your ability, then after a certain length of time
that was agreed on, they assume your insurance rates and you can
soar. Good luck

Larry, I am not a commercial stone setter, but I have repaired a lot
of stones for jewelers over the last 25 years. Most store owners
charge high prices for stone setting to cover the cost of replacement
for broken stones. This is their work around the problem of trust
between the customer and the store owner. The flip side of the coin
is tell the customer that stone setting has no guarantee and
therefore no liability. Most customers will not let you work on
their jewelry if you do not guarantee the setting. This is the catch.
When a stone is damaged does the store owner tell the customer. Most
do not. They contact someone like me to repair the stone if it is at
all possible. The common request is. Repair the stone to original
size and shape for the least amount of money. The stone must go
back into the original mounting and look like it was not recut. This
is standard operating procedure across the US. I have a similar
problem with stone cutting. Most customers expect you to cut the
best, largest, most valuable stone, for the least amount of money.
Customers expect me to assume the liability that their stone will be
a gem once cut worth many times the value of the original stone plus
the cutting charge. I tell them that there is no guarantee and I
assume no liability for the stone. If at anytime the customer
displays an unacceptable attitude I cancel the job and move on.

Gerry Galarneau

Larry: My doctor complains that a large portion of his fee goes toward
the high cost of malpractice insurance. If Lloyds of London were
willing to underwrite a stone-breakage policy for setters, I’m sure
the premium would be sky-high. Could you pass this cost to your
customer? I’m sure they 'd flip! But aren’t they asking you to
self-insure yourself against breakage? What should you charge for
this insurance? My insurance agent suggests 10% of the value of the
stone…that’s what insurance underwriters would suggest for such a
high-risk policy. Would your client be willing to pay $1000 to have
a $10,000 diamond set? You already know the answer. They are already
underwriting their own stone-breakage policy, and are tired of paying
out claims.

A good stone-setter is an experienced professional. They not only
have a mastery of setting techniques, but an understanding of the
properties of the stones they are setting as well. Setting very
fragile stones is risky, and some are broken no matter how careful
the craftsman is. Breaking a hard stone, like a diamond, is a rare

I’m sure your client is gun-shy, after the experience they’ve had.
Perhaps you should suggest that they carry a “deductible”, say 10% of
the value, and you agree to be responsible for the balance. Of
course, if they’re sending you sphenes to set in white gold prongs,
Even that wouldn’t be enough…

Good luck
Doug Zaruba

Larry hello!

Well, Larry some feedback could be an understatement! I predict you
have started quite a lengthy thread. Good! This is about the money we
make, the time it takes, and the care we employ when setting gems.

Here in the Seattle area we get stuck with the bill when something
breaks. I think it is the logic of “Who was the last one to touch
it?” I agree with the stores to a point. The problem lies in when the
gem was taken in for setting. Largely the salespeople taking in jobs
are not overly intent on establishing the condition of the piece to
be worked on. There primary focus is to follow the instructions of
the customer and assist in that regard. Now when the job hits your
bench or mine and we see the culet of the stone is missing, that is
the recurring problem I see. Calling a customer after the fact is
embarrassing for them. They (mistakenly) would rather just have you
set it than call the customer. The other scenario is new stones of
poor clarity etc. Some retailers feel that we are less than
professionals if we can’t set stones of any clarity at our risk. That
opinion is flawed. My take is if it has any girdle inclusions,
especially external, I call and get an NR (not responsible) I get the
salespersons name and date the envelope. Now I set it at their risk.

I did an 18k white gold band about three years ago. I channel set 9
baguette emeralds. Some were already chipped, they were also poor
quality. The store owner had tried unsuccessfully to have the woman
spend the extra and use platinum (please ask her again)! The only way
I would do the job was if he were to supply extra stones if needed
and replace a couple of the badly chipped ones. He did me one better.
He sent with the job 6 additional (matched quality, yuk)! stones and
noted to use them as I saw fit. Her stones were sentimental of
course. I assumed she would be punching one out a week and I would of
course be married to it. Such was not the case! Lucky me. I was
working with a 30+ year bench jeweler/store owner. Success stories
like that are only going to happen with qualified careful job take
in. Educating and working with a customer over breakage concerns is
handled by confident, knowledgeable, sales staff.

I like your idea about a few % over list charges for taking risk
yourself How about just charging one percent for stones over $1000.
whlse. value? Just set at the list for the rest. That 2.5ct pear at
$14,000. would net you $140.00 to set the stone! Not bad for an hour
plus setting job! The stores would go for that after it snows in

Just try and work with whomever puts your work together and get an NR
before you ever see the envelope. Call on stones when you feel they
are of a fragile nature. The rest I am afraid will likely be set at
your responsibility.

My wife could always tell by the look on my face I had broken
something. She would say slowly, “What happened?”


Larry, one thing you might do is to up your rate to them to cover the
cost of insurance to cover any eventuality. I don’t know what it
would cost, but it might be only a small charge on top of your
business liability policy, so maybe that’s worth looking into.

Wayland, MA

Hello Mr. Seiger,

I was a Buyer for several large national retail chain stores. We
would require vendors to carry Broad-Form Liability Insurance
coverage. You might want to look into this kind of coverage. If the
vendor was a small manufacturer or new, we would sometimes work out a
pro-rate or discount concession to cover cost.

Larry, you have answered your own question. As an apprentice some 30

  • years ago I was assured by my instructor (a German immigrant) that:
    “Some diamonds are made to be broken”. My advice to you is to let the
    account go. It does not matter how good of a diamond/stone setter you
    are, the earths stones have natural defects and some, no matter how
    hard, will sever with the slightest pressure. You have allready
    weighted the advantages and disadvantages. Seems like you want us to
    agree with you. I think we do. Robert R. Wooding

Larry, The best course is to avoid any liability whatsoever. Natural
stones are never compleetely flawless. The stone setter can never
completely know the condition of the stone cost effectively. By
accepting any liability you set yourself up for trouble. Sounds to
me like the store has been having problems and they see you as an
opportunity to transfer their problems to you. My advice:

Never get into a urinating constest with a skunk. Even if you win,
you smell bad.

If you decide to accept some liability, check with your insurance
company and attorney first. Also, people have a sentimental
attachment to their jewelry. One unhappy camper will do more damage
to your reputation than twenty happy campers can fix. If you weren’t
good, they wouldn’t be talking to you. Stand your ground.


I would approach this from a “damn, I’m good” perspective and inform
the prospective employer that I seldom damage stones, but that any
reputable, professional stonesetter is not going to assume
responsibility for Acts of God. Tell them they have to pick up the
insurance premium on the front end, that anyone who would agree to
what they are proposing is desperate for a job and not a very good
setter. Educate them about why some setters break stones through
errors in technique (too much pressure, no clearance for the girdle,
etc.) which you don’t make, and explain why setting some stones is so
hazardous that the customer needs to be told about the risks ahead of
time and that you can do that. You might offer to accept a lower
wage rate if there are actual losses from breakage beyond an agreed
upon figure. If they are just jacking you around, they won’t agree
to this, and you don’t want to work for them anyway. If they are
really just trying to protect themselves, they will agree to a little
bet and accept your challenge.

Businesses try all kinds of things. Some of the shopping networks
will buy lots of stones and then try to return those they break in
setting. Nice work if you can get it. People will try anything.
Don’t let them bulldoze you.

Good Luck,

Hi Larry, I think this statement " trying to market to a more upscale
clientele" is very telling. Obviously if they had that clientele
already they wouldn’t be picking at you about stone liability. In our
store, the owner of the store bears the liability, if I chip a stone,
the owner of our store pays to have it recut. Its only happened a few
times, but it does happen. If a customer brings stones in to have
remounted, the owner checks them out and if he feels that there will
be a problem with the setting, he tells the customers that we will set
it at your risk. The service we provide is very important and any
jeweler worth his salt knows there is always a risk with stone
setting. If the store owner is not confident enough to cover that
risk, why should you.? It would be a different matter if we could
easily access insurance coverage to pay for the breakage but we can’t.
This is one of those hazards of doing business. If you do decide that
financially it would be worth the risk knowing your own abilities,
then absolutely charge for that. I think this company will have a very
hard time finding someone highly skilled who would be willing to
accept their criteria.

Good Luck!

Barbara Gillis

Boy, I’ll be interested to hear what others say about this too.
Personally, as I do trade work, I commonly replace small and
inexpensive stones as a courtesy. I figure, for $5-$50, it’s a good
investment towards good will. If my accounts make money, I make
money. But I let them know in no uncertain terms, if they give me a
stone that is risky to set, the risk is all theirs. They know I’m as
good a setter as they’ll get. If they don’t like the odds, they can
pay the really big bucks for a guarantee. My charges go up along
with the level of difficulty and the size of the stone, so a carat
trillion costs approximately 1/3 more than a carat marquise. I
figure, if they don’t like my breakage rate, they better let me know,
and then they can decide if they need to find someone else. I
figure, if you’re going to take the kinds of risks they are talking
about, you better charge plenty. I would only accept these kinds of
terms if I were selling them MY stones at wholesale prices (as I’ve
seen, 100% over cost of materials for a finished piece). But then,
in that case, it’s a moot point. Sounds like you know what you are
doing, or they wouldn’t be having you salvage their hack’s work.
Better stick to your guns, they’ve got to know that you are a better
deal for them even if you don’t accept any liability. I have become
quite savvy about the thinking of some retailers, and they will try
to cover their butts after a bad experience by cooking up these kinds
of schemes for the next guy. But in this case, they already know you
are a better setter than they’ve got, so my bet is they’ll back off.
They’re trying to get lucky.

David L. Huffman

larry, we get this frequently. You can accept whatever level of
responsibility you wish, on a case by case basis. I’d suggest setting
an upper limit of liability as a basic starting point, and reserve the
right to refuse liability on any stone you feel at all nervous about.
Most of what they send you may be smaller stones you don’t mind
covering. Anything that comes it which you don’t feel comfortable
being responsible for, you call them and advise them of that fact.
Then it’s their decision. Most retailers have jewelers block
insurance policies as well. Some of these policies can cover stone
breakage, either your own policy when you break a stone, or the stores
policy when you break their stone. If you’re going to be accepting
responsibility for more than minor costs, make sure you’re insured, or
have the means to self insure. And if either insuring the stones or
self insuring them costs you, then your rates can go up to compensate.

But for the record, most setters I’ve known don’t accept
responsibility for the stones they are given to set. If they had to
do so, they’d only accept those stoes for setting that they knew they
would never break. A lot of stones would never find a setter…
However, when a setter works for a somewhat larger job shop, then it’s
more common for the shop to take responsibility, though still always
with the right to refuse that liability if they aren’t sure they are
pretty safe with it.

It should be noted that while it’s nice and easy to inform a customer
that they have to be responsible for stone breakage, it’s not always
wise to assume they then will do so. If you represent yourself as a
professional, even refusing liability for a stone might not protect
you if it’s broken and the customer then changes their mind and sues.
They would have to be told, and sign a waiver indicating that the
stone they’ve asked you to set is unusually risky, or some such, and
that they realize there is a risk which you will not accept even if
breakage could be alleged to be due to the negligence of the setter.
It all gets quite sticky. I’d suggest you’re best off checking with
your insurance agent to find out what’s involved in buying coverage.

Peter Rowe


It is absolutely the retailers responsibility to accept any loss
incurred due to a stone damaged during setting. I have a long time
customer with a very high end store who has always said that the
person making the lions share of the profit should take the lions
share of the risk, I think that is very true. How can we be expected
to assume responsibility for an expensive stone when we are charging
relatively little to set it? Over the years I have been asked to
replace a few damaged stones.

A quick story; I had to set a very nice oval ruby for a retail
customer some years ago. It was so nice that I pre-set it (set it,
removed it, polished the mounting and cleaned it, then reset the
ruby). After I set it I just polished the tips of the prongs and
swished it in the ultrasonic and rinsed it. I looked at the stone and
it was no longer beautiful, it had been oiled. I called the jeweler
and told them the story, she was very upset, she said I never should
have swished it and that it was my fault. She refused to resolve the
matter, withholding payment for previous work she had received.
Finally I ended up paying for the stone to get the money I was owed
and I dropped the account. I returned the damaged stone to the
supplier and they paid me half of the original cost. I took every
precaution I could think of and I still was the bad guy. Setting is
an inherently dangerous activity, aside from cutting it is when the
stone is most at risk. Jewelers should know that.

Currently the customer base I have would not expect me to replace a
stone that was damaged during setting (other than melee). We will pay
the cost of a recut but not weight loss or anything else. Our
customers trust us to be professional and careful. Many stones are
accidents waiting to happen. Part of the reason we have this
arrangement is because we very rarely damage anything. If we make a
stupid mistake we will pay for that.

Like you Larry, I have often thought that we could assume the risk if
we charged a percentage of the cost of the stone, like insurance. I
don’t think they would go for that, but it may help get your point
across. As you can see I think you are right to be reluctant to step
into this swamp of potential trouble. It is always better to work
this stuff out before something bad happens. Good business people
will understand your point of view.

Mark P.

I’ve already commented on this thread, but afterwards, another
thought occurred to me. About the only thing that keeps those
ignorant but in control from demanding outragous configurations of
stone setting is the cost of breakage. I’ve warned the salespeople
that channel setting emeralds is stupid, but they still sell it that
way. At that point, I re-itterate the foolishness of the
proposition, then insist on diamond cut emeralds and all work in 18K
with no promises. I have shown them how foolish it is to set
tanzanite in 14K white heavy bezels, and inform them that I sometimes
can’t clean up around the stone, and that a little glue may even be
necessary. Usually, all I suceed in doing is making them think
twice, but I accept NO responsibility if the expenses eat their
margin and maybe their commission too. But if you remove all
consequences for what they devise, they will be expecting you to pave
set apatite in stainless steel. (of course it can be done, but WHY?)
And you will be the one who is raising the bar each time you suceed
with the impossible (which will then become the expected).

David L. Huffman (ok,ok, sorry for raising my all-caps voice, but
it’s an issue for me)

Larry, your question about liability in the case of damage while
working on someone else’s goods is an important one.

I raised this question with my insurance company and they simply said
that they would not cover that kind of damage under any circumstances.
As far as I am aware, the person doing the work is entirely
responsible for the damages, and I think this would be upheld in a
court of law. When you accept the work into your shop, you are
tacitly presenting yourself as the “expert”. Any mistakes or damages
will be charged to you.

Given the enormous downside if something goes wrong, is it reasonable
to charge as little as we do? That is something each of us has to
decide for ourselves. The only recourse I can think of is to have the
client accept the responsibility by signing a disclaimer. Check with
your attorney about this however, because I think even with a
disclaimer, you will still be responsible.

Of course, if bench jewelers were more organized, we might be able to
negotiate some sort of block insurance that would cover this. The
last time I brought this up I was admonished by the statement that
jewelers are artists, and as such, they don’t incline to join groups.
This is just one example of how joining together could have important
benefits for us all.

Ricco Gallery
125 W German St/PO Box 883
Shepherdstown WV 25443

Hello all, One thing that has been mentioned a few times is getting
insurance to cover broken stones, like a jeweler’s malpractice
policy. There is no such thing. No one, even Lloyds of London will
insure someone for this type of liability. If it were so easy,
believe me I would have gone that route. I’m still waiting to hear a
few more replies and appreciate those that have already wrritten.
I’ll let everyone how it all works out.

Larry Seiger

I am a little stunned by the thread that is running on this topic.

I was trained in a time when it was assumed that the business owner
was responsible for all goods under his care, custody and control. As
a contractor, I am a business owner. No matter what stones I am
setting, I have accepted responsiblity for their well being. Of couse,
there are ocasions when I will tell the client that what they are
asking for is out of the range of my skills. Perhaps the stone would
be better set with glue. Perhaps there is a flaw running too far thru
the stone. Maybe they are trying to set a stone with a hardness of 3
or less. I dunno. I do know, however, that they are expecting me to
take care of their stuff and if I am taking an unreasonable risk with
their stuff, I am responsible. That is why they are paying me. They
think that they are entrusting their stuff to an expert. If I am
taking only reasonable risks for their stuff, then I can accept that
risk and pay for any damages. Usually, this only involves polishing or
minor recutting with little weight loss. A cost thay I don’t enjoy
covering, but a cost that comes with being a professional.

This stand is not for employees. It is the job of the entrepreneur.
The business operator.

Bruce Holmgrain
JA Certified Master Bench Jeweler

A thought…David Geller, a successful businessman, and now retired
but busy seminar giver spoke at the JCK show in Las Vegas and
suggested the following regarding “insuring” stones for repair.

Two fold: ONE== charge a 20$ fee for checking and tightening all
stones in the item. If done, the customer is guaranteed to have their
stones replaced free of charge if any should fall out and be lost for
a years time. It is unlikely that this would occur, and if it did the
amount of times such a charge occured would outstrip the cost of
replacements by many times. SECOND== Think about investing in a
microscopic camera that will take photos of inclusions, fractures and
laser drills. With these identified then you can qualify your
guarantee to exclude possible problems stemming from working on
unstable stones.

And Finally, We should all be charging a markup that allows to make
enough money for us to cover our mistakes with dignity and
professionalism. We should not be driven to the poor house because we
dare to work in an arena people want to purchase but cannot
themselves maintain

Thanks for listening to my tirade,…Gianna