Consignment Stock on the Move: Who's Insured When Watches Change Hands?

You place three watches on consignment with a partner dealer in Kuala Lumpur. The watches leave your Singapore showroom via courier. During transit, the package is stolen. Who files the insurance claim? Under whose policy? Does your Jeweller's Block cover the watches while they're in a courier van crossing the Causeway? Does your partner's policy apply before the watches arrive at their premises? And if neither policy covers goods in transit, who absorbs the loss?

This guide unpacks the insurance complexities of consignment stock in transit, explains insurable interest, and identifies the coverage gaps most watch dealers don't discover until something goes wrong.

This guide covers:

• How insurable interest works for consignment stock
• Where JB coverage typically starts and stops for consignment
• The transit gap between sender and receiver
• How marine cargo insurance resolves the ambiguity
• What your consignment agreement should say about insurance

Insurable Interest: Who Owns the Risk?

Before you can insure something, you need an insurable interest in it. This means you must stand to suffer a financial loss if the goods are lost or damaged. For consignment stock, the question of insurable interest depends on the terms of your consignment agreement.

Consignment Scenario	Who Typically Owns the Stock	Who Has Insurable Interest
Watches sitting in your showroom (your own stock)	You	You
Watches you've sent to a partner on consignment	You (until sold)	Both: you as owner, partner as bailee
Watches a supplier has sent to you on consignment	Supplier (until you sell)	Both: supplier as owner, you as bailee
Watches in transit from you to the consignment partner	You	You, and potentially the partner depending on agreement terms

The critical point: during transit, the consignment partner hasn't received the goods yet. They're still yours. You bear the ownership risk. But does your insurance cover them while they're moving?

Where JB Coverage Starts and Stops

Jeweller's Block policies typically cover consignment stock in two directions: outward (stock you send to others) and inward (stock others place with you). But the cover usually applies at the destination, not during transit to it.

A typical JB policy covers:

• Your own stock at your insured premises
• Your stock at a specified consignment partner's premises (outward consignment)
• Third-party stock at your premises (inward consignment, goods in custody)
• Stock at exhibitions and trade shows (with exhibition extension)

What it often does not cover: the physical movement of that stock between locations. This is the sendings exclusion discussed in our guide on what your JB policy doesn't cover in transit.

So your JB policy might cover the watches once they arrive at your partner's shop in Kuala Lumpur. But during the courier journey from Singapore to Kuala Lumpur? That's the gap. For more on how consignment agreements work and why they matter, see our guide on consignment agreements for jewellers in Malaysia.

The Transit Gap in Practice

Here's what a typical consignment transit looks like, and where coverage typically applies or doesn't.

Stage	What's Happening	Typical JB Cover	Marine Cargo Cover
1. Watches in your safe	Stock on premises	Covered	Not yet attached
2. You pack and hand to courier	Leaving premises	Ends (if sendings excluded)	Attaches
3. In courier transit SG to KL	Goods in movement	Gap	Covered
4. Delivered to partner's premises	Arrives at destination	Covered (outward consignment)	Terminates
5. On display at partner's shop	Stock at consignment location	Covered	Not applicable

Stage 3 is where losses happen and coverage doesn't exist for many dealers. The courier's own liability is typically capped far below the watch's value. The consignment partner's policy hasn't attached because they haven't received the goods. And your JB policy has let go because the watches left your premises.

How Marine Cargo Insurance Resolves This

A marine cargo policy under ICC(A) covers goods from warehouse to warehouse. For consignment stock, this means coverage from the moment the watches leave your premises until they arrive at the consignment partner's premises. The policy covers all risks of loss or damage during that transit, subject to the standard exclusions (wilful misconduct, insufficient packing, inherent vice, delay, insolvency of the carrier, war, and strikes).

Under an open cover facility, you declare each consignment shipment. The premium is calculated on the declared value of each sending. You don't need to arrange new cover for each shipment; you simply declare it under the existing facility.

This is especially important for consignment because the movements are frequent and variable. You might send two watches to one partner this week and five to another next month. The open cover accommodates this irregular pattern without requiring per-shipment policy arrangement.

What Your Consignment Agreement Should Address

Insurance obligations should be written into every consignment agreement. If your current agreement is silent on insurance during transit, both parties are assuming the risk is covered when it may not be.

Clause Topic	What It Should Specify
Risk transfer point	At what moment does risk pass from consignor to consignee? On dispatch? On delivery? On acceptance?
Transit insurance obligation	Which party is responsible for insuring goods during transit?
Minimum coverage standard	What level of cover is required? ICC(A) at agreed value?
On-premises insurance	Which party insures the goods once at the consignee's premises?
Proof of insurance	Should evidence of cover be provided before each shipment?
Claims responsibility	Who manages the claim process if loss occurs during transit?

Getting these terms right upfront prevents disputes when something actually goes wrong. For more on structuring consignment arrangements, see our guide on consignment risk for jewellers.

FAQ

If I own the watches on consignment, can't I just claim under my JB policy during transit?

Only if your JB policy includes sendings cover and the shipment falls within the policy's transit terms and limits. Many JB policies exclude sendings or impose sub-limits that don't match your shipment values. Check your specific policy wording.

Can my consignment partner's JB policy cover the watches during transit to them?

Unlikely. Their JB policy typically covers goods at their premises, not goods in transit to their premises. The cover usually attaches on arrival, not during the courier journey. Additionally, their insurable interest as bailee may not arise until they take physical custody.

Does the consignment partner need their own insurance for my watches?

Once the watches arrive at their premises, both parties have insurable interest: you as the owner, and they as the bailee responsible for goods in their custody. Ideally, the consignment agreement specifies which party's insurance is primary for on-premises risk.

What if both my JB and the cargo policy could respond to the same loss?

This is a double insurance situation. Both underwriters should be informed about the full programme. In practice, the policies should be structured so that JB covers premises risk and cargo covers transit risk, with a clear handover point. Your broker should coordinate this.

How do I value consignment stock for cargo insurance purposes?

Typically at the agreed consignment value, which may include cost plus a percentage uplift (commonly 10-20%) to cover shipping, insurance, and incidental expenses. The open cover policy should specify the basis of valuation in the schedule.

What happens if the consignment agreement says nothing about transit insurance?

Then neither party has a contractual obligation to insure the goods during transit. In practice, the consignor (the stock owner) bears the financial risk because they still own the watches. The practical answer is: insure your own goods, don't assume the other party has it covered.

MINT Conclusion

Consignment is how the watch trade works. Dealers share stock, build relationships, and reach customers through trusted partners. But every consignment shipment creates a transit moment where the watches belong to someone, are in a courier's hands, and may not be insured by anyone.

Solving this doesn't require complex restructuring. It requires acknowledging the gap, putting a marine cargo facility in place for transit, and ensuring your consignment agreements address insurance explicitly.

MINT provides specialist insurance for Singapore's luxury watch ecosystem, from Jeweller's Block coverage that protects dealer inventory to collector policies designed for how watches are actually owned and moved.

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Disclaimer: This article provides general guidance on insurance coverage available in the Singapore and Malaysian markets as of March 2026. Policy terms, conditions, and availability vary by insurer. Always review your specific policy wording or consult a licensed broker before making coverage decisions.