Who Pays for My Broken Stone? The Risks and Realities of Gemstone Setting

Jewelry setting is a precise craft that requires skill, patience and delicacy. Yet even the most experienced setters occasionally crack or chip stones during the setting process. This is more common with softer stones such as Paraiba tourmaline or hauyne, and it is more likely to happen during the pave setting of smaller gems against a hard metal such as white gold. This is why we generally recommend platinum or yellow gold if we’re concerned about the softness of the stones.

All gemstones have natural inclusions or particular cleavage directions, which make them inherently fragile. Setting stones into metal mounts involves pressure and manipulation with harsh tools, which can cause cracks or fractures even with careful handling. Some gemstones may even have hidden weaknesses that are undetectable until stress is applied during setting. For example, if a gemstone is oiled or fracture-filled, it is much more difficult to determine its potential for damage ahead of time, even when studied carefully with a loupe.

Setters work with a variety of gems and metals, and while their expertise helps minimize risks, complete prevention of breakage is virtually impossible. This fragility is a defining characteristic of the trade and is appreciated by both setters and jewelry designers. For the novice gemstone owner, however, the risks jewelers and setters take during manufacture are not always made clear.

Despite the risk of breakage, it is a well-known fact in our industry that setters generally do not replace stones they break during setting. In addition, the insurance obtainable in industry does not include insurance for the setting process as it could lead to sloppy workmanship and too many insurance claims. (An insurance company also wants to make money, after all). And any insurance that can be obtained is usually expensive and involves a high deductible because gemstone setting is considered a high-risk practice. (Also, because gemstones worn in jewelry are subject to wear and tear.)

Within the jewelry industry, it is generally accepted that the risk of stone damage belongs to the jeweler or the person who owns the stone, not the setter. When pieces are sent out for stone setting, most setters clarify beforehand that they are not responsible for replacing stones that break during the process. Holding the setter responsible for every incident would be unfair and could discourage professionals from taking on challenging projects.

It’s also worth noting that many setters are independent contractors or small business owners. Replacing a broken stone, especially a rare or high-value one, can be financially devastating. Sourcing, matching, and replacing gemstones is costly, and if setters were expected to absorb those losses every time, it could put them out of business entirely.

Meanwhile, a jeweler can recover the cost of a damaged gemstone if sufficient margin is built into the sale to offset the loss.

In addition, to help lower risk, jewelers standardly provide sufficient extra gemstones to the setter to cover for breakage and loss. For a single job, jewelers add extras to most of the melee in the layout, and for multiple jobs of the same type for a small jewelry line, extra center stones are supplied as well. Additionally, jewelers who accept client’s gems for setting can demand a higher price for setting work to help with the risk they assume – should they assume it in the first place – not all retail jewelers accept clients’ stones. In fact, many do not.

Ideally, gemstones owned by retail clients should be insured by the client, as they are the official owner of the gem. Some companies do offer insurance for setting and repair in addition to loss. Jeweler’s Mutual is the most well-known company in our trade to offer this. But even if you use Jeweler’s Mutual for your gemstone, make sure you understand all the fine print and it pays to give them a call before sending a gem in for setting to find out about any special requirements for shipping and handling, as well as the costs of the deductible. Some jewelry insurance companies have high deductibles to protect themselves from risk so you may find out that your gemstone is less expensive than the deductible, which means you pay for loss or damage yourself.

At CRD, we generally do not accept clients’ stones for precisely the reasons above. If we haven’t sourced the stone, we may not be able to replace it. If it is treated, we may not be able to assess the risk of setting it. And the gem does not come insured, we would be taking on unnecessary risks in transporting and working on a stone that does not belong to us. We also make very little profit on labor alone. However, if the gemstone is insured for setting by its owner, and there is sufficient paperwork to inform us about any treatments that pose a risk to setting, we can make exceptions. Still, communication is key. It is important that industry jewelers help retail clients understand the risks involved, and how these can be mitigated.