Stock Protection Gaps 2026: What Standard Dealer Coverage Doesn't Include

Stock protection gives dealers peace of mind. But that peace of mind can become false confidence if you don't understand where coverage ends.

This guide covers the gaps that catch dealers by surprise: the scenarios where you assume you're protected but aren't. Knowing these gaps isn't about scaring you. It's about helping you manage the risks that sit with your business, not your coverage provider.

What this article covers:

• Courier and postal losses
• Mysterious disappearance
• Damage during repair work
• Payment fraud and counterfeit currency
• Gradual deterioration and wear
• Unattended vehicle losses
• Other common exclusions
• How to manage uncovered risks

Courier and Postal Losses

This catches more dealers than almost any other gap.

The Standard Exclusion

Most dealer stock protection explicitly excludes goods sent by post, courier, or any third-party carrier. The typical wording: "sendings by post, rail or common carrier."

Sending Method	Typically Covered?
Personal delivery by you	Yes
Employee hand delivery	Usually yes
Registered post	No
Courier (DHL, FedEx, etc.)	No
Ninja Van, Lalamove, etc.	No
Grab delivery	No

Why This Exists

The logic is straightforward: once goods leave your control and enter a third party's custody, you can't manage the risk. The courier's liability limits (often capped at declared value or a low maximum) become the only protection.

The Practical Impact

You sell a watch for SGD 25,000 and ship it via courier. The package is lost or stolen in transit. Your stock protection won't pay. The courier's liability might cap at SGD 500-1,000 depending on their terms.

The gap: SGD 24,000+ sits with you.

Managing This Risk

Option	Consideration
Personal delivery only	Safest for high-value
Courier with declared value	Pay premium for higher limits
Marine cargo insurance	Separate transit policy
Cash on delivery	Risk transfers at handover
Customer arranges pickup	Risk transfers at your door

For high-value items, personal delivery or customer collection is the only truly protected option under standard stock protection.

Mysterious Disappearance

"It was here yesterday, and now it's gone." This scenario is almost never covered.

What It Means

Mysterious disappearance refers to stock that goes missing without any evidence of how it disappeared. No break-in, no theft witnessed, no explanation. It's simply not there at stocktaking.

The Standard Exclusion

Typical wording excludes "goods missing at stocktaking or goods unaccounted for." This means:

Scenario	Covered?
Break-in with evidence of forced entry	Yes
Armed robbery with police report	Yes
Employee caught stealing on CCTV	Yes
Item missing, no evidence of theft	No
Inventory short at year-end count	No
"Must have been stolen but we didn't see it"	No

Why This Exists

Without evidence of an insurable event (theft, burglary, fire, etc.), there's no way to verify a loss occurred versus administrative error, unreported sale, or internal theft that can't be proven.

The Practical Impact

You count inventory and find a Rolex Submariner missing. You're certain it was there last month. But there's no CCTV footage of it being taken, no break-in, no witness. You file a claim.

The likely outcome: Claim denied. No evidence of covered event.

Managing This Risk

Practice	Purpose
Daily display counts	Catch discrepancies immediately
CCTV covering all stock areas	Creates evidence trail
Controlled access to stock	Limits opportunity
Witness protocols for high-value	Two people verify movements
Immediate incident reporting	Don't wait for stocktaking

The best protection against mysterious disappearance is preventing it through controls, and catching theft quickly enough that evidence exists.

Damage During Repair Work

We covered this in detail in our repair liability guide, but it's worth repeating as a coverage gap.

The Standard Exclusion

"Damage to property whilst being actually worked upon and directly resulting therefrom."

Scenario	Covered?
Customer watch stolen from your safe	Yes
Customer watch damaged in fire	Yes
Customer watch scratched during service	No
Watch dropped while moving to bench	Maybe
Crystal cracked during hand installation	No

Why This Exists

Repair damage is within your professional control. It's a skill and care issue, not an insurable random event. The expectation is that competent dealers manage this through proper technique.

The Practical Impact

You're servicing a customer's Patek Philippe. During reassembly, the dial gets scratched. Repair cost: SGD 8,000 for dial replacement.

Your coverage pays: Nothing. This is your business liability.

Managing This Risk

Option	Consideration
Professional indemnity coverage	Separate policy for service liability
Pricing for risk	Build margin into service fees
Skill investment	Better training, fewer incidents
Clear customer agreements	Manage expectations on inherent risks

Payment Fraud and Counterfeit Currency

You've sold the watch. The money turns out to be fake or fraudulent. Can you claim?

The Standard Exclusion

Most policies exclude losses arising from:

• Counterfeit currency
• Fraudulent cheques
• Dishonoured payment instruments
• Credit card chargebacks
• Fake bank transfers

Payment Fraud Type	Covered?
Counterfeit cash accepted	No
Bounced cheque	No
Fake transfer screenshot	No
Credit card chargeback	No
PayNow/DuitNow reversal scam	No

Why This Exists

Payment verification is a commercial skill, not an insurable risk. Accepting bad payment is considered a business decision failure, not a loss event like theft or fire.

The Practical Impact

A buyer pays with a convincing fake SGD 10,000 stack for a watch. You discover the counterfeits when banking. The watch is gone, the money is worthless.

Your coverage pays: Nothing. Payment fraud is your business risk.

Managing This Risk

Practice	Purpose
Cash verification equipment	Detect counterfeits
Bank transfer confirmation	Wait for funds to clear
No cheque acceptance	Eliminate bounced cheque risk
Escrow for large transactions	Payment verified before release
Know your customer	Reduce fraud targeting

Gradual Deterioration and Wear

Stock that loses value over time through normal processes isn't covered.

The Standard Exclusion

"Wear and tear, gradual deterioration, moth, vermin, or inherent vice."

Scenario	Covered?
Watch stolen	Yes
Watch damaged in fire	Yes
Leather strap dried out over time	No
Movement accuracy degraded	No
Dial patina changed	No
Bracelet stretched from display wear	No

Why This Exists

These are expected business costs, not sudden loss events. All stock degrades to some degree over time. Managing this is part of inventory management.

The Practical Impact

A vintage piece sits in your display for two years. The leather strap cracks from drying. The dial shows increased aging. Value drops significantly.

Your coverage pays: Nothing. This is inventory aging, not loss.

Managing This Risk

Practice	Purpose
Proper storage conditions	Slow deterioration
Regular stock rotation	Sell before significant aging
Markdown aged inventory	Recover value before it drops further
Appropriate pricing	Account for potential aging in margins

Unattended Vehicle Losses

This gap catches dealers during deliveries and off-site activities.

The Standard Exclusion

"Loss from any unattended vehicle" is standard. The vehicle is unattended if no one is in it or immediately adjacent to it.

Scenario	Covered?
Theft while you're driving	Yes
Robbery at traffic light	Yes
Smash-and-grab while you pump petrol (alone)	Likely no
Break-in while car parked and you're in meeting	No
Theft from locked boot while you're in restaurant	No

Why This Exists

Vehicles are easily targeted. Leaving goods in parked vehicles dramatically increases theft risk. Coverage providers don't want to subsidise this avoidable exposure.

The Practical Impact

You're delivering a watch. You stop for lunch, leaving the watch locked in your boot. When you return, the boot has been forced open. Watch gone.

Your coverage pays: Likely nothing. Unattended vehicle.

Managing This Risk

The only management is compliance: never leave goods in unattended vehicles. Take the bag with you everywhere. If you can't, don't make the stop.

Other Common Exclusions

Several other exclusions appear in most stock protection policies:

War and Terrorism

Event	Covered?
Civil unrest looting	Often excluded
Terrorism-related damage	Usually excluded
War or military action	Always excluded

Separate terrorism coverage may be available in some markets.

Nuclear and Radiation

Any loss connected to nuclear events, radiation, or radioactive contamination is excluded. This is standard across all commercial insurance.

Government Action

Losses from confiscation, nationalisation, or requisition by government authority are excluded.

Consequential Losses

Your direct stock loss may be covered, but consequential losses typically aren't:

Loss Type	Covered?
Value of stolen watch	Yes
Lost profit from sale that didn't happen	No
Business interruption costs	Usually no (separate coverage)
Reputation damage	No

Dishonesty of Employees

This varies significantly by policy:

Scenario	Check Your Policy
Employee theft with evidence	Sometimes covered
Employee theft without prosecution	Often excluded
Collusion with outsiders	May be excluded

Some policies include fidelity coverage; others exclude all employee dishonesty. Verify your specific terms.

How to Manage Uncovered Risks

Understanding gaps is step one. Managing them is step two.

Risk Assessment

For each gap, assess:

Question	Purpose
How likely is this scenario?	Prioritise real risks
What's the potential loss?	Size the exposure
Can I prevent or reduce it?	Control what you can
Can I transfer it elsewhere?	Other coverage or contracts
Can I absorb it if it happens?	Financial resilience

Operational Controls

Most gaps can be partially managed through operations:

Gap	Operational Control
Courier loss	Personal delivery policy
Mysterious disappearance	Daily counts, CCTV coverage
Repair damage	Training, documentation
Payment fraud	Verification procedures
Unattended vehicle	Strict compliance

Additional Coverage

Some gaps can be filled with separate policies:

Gap	Potential Coverage
Courier transit	Marine cargo policy
Repair liability	Professional indemnity
Employee theft	Fidelity bond
Business interruption	Separate BI policy

Pricing for Risk

Some risks simply sit with the business. Price accordingly:

• Build margin into service fees to cover occasional repair incidents
• Factor delivery costs into pricing rather than absorbing courier risk
• Maintain reserves for uninsurable losses

FAQ

Can I get coverage for courier shipments?

Yes, through marine cargo or transit insurance, separate from your stock protection. This is typically arranged per-shipment or as an annual policy. Costs depend on value, frequency, and destinations.

Why doesn't stock protection cover everything?

Coverage is designed for sudden, accidental loss events that are outside your reasonable control. Risks that you can control (payment verification), that are expected business costs (wear and tear), or that involve third-party custody (couriers) are typically excluded because they're manageable through business practices rather than insurance.

Is mysterious disappearance ever covered?

Rarely. Some high-premium policies may offer limited coverage with significant conditions (daily stocktaking requirements, CCTV evidence, etc.). Standard market policies exclude it.

What about employee theft?

Check your specific policy. Some include fidelity coverage with conditions (police report filed, prosecution pursued). Others exclude employee dishonesty entirely. It's one of the most variable terms across policies.

Can I negotiate to remove exclusions?

Sometimes, for additional premium. High-value accounts with strong controls may negotiate better terms. But core exclusions like war, nuclear, and gradual deterioration are non-negotiable.

How do I know exactly what my policy excludes?

Read your policy wording, specifically the "Exclusions" section. Don't rely on summaries or broker descriptions. If anything is unclear, ask your provider for written clarification.

What's the most common gap that catches dealers?

Courier losses and unattended vehicle exclusions. Both involve scenarios dealers face regularly and often assume are covered.

Should I just accept these gaps?

Accept what you can't change (war exclusion), manage what you can control (operational practices), and transfer what's available (additional coverage where cost-effective). Don't assume gaps mean you're helpless.

MINT Conclusion

Understanding what isn't covered is as important as knowing what is.

The gaps in standard stock protection aren't arbitrary. They reflect risks that are better managed through business practices than through claims. Knowing these gaps helps you build a business that's genuinely protected, not just technically insured.

MINT provides specialised stock protection for watch dealers and jewellers in Singapore and Malaysia, with transparent terms and clear explanations of what's covered and what sits with you.

Speak with MINT about dealer coverage