Pawn shops hold other people's property as collateral for loans, which creates a coverage gap that standard commercial property cannot address. The pledged goods — jewelry, electronics, firearms, instruments — belong to customers, not to the pawn shop. They require an inland marine policy or dealers block policy specifically designed for non-owned property in the pawn shop's care. Combined with the robbery and burglary crime exposure, the FFL dealer liability if firearms are sold, and the volatile inventory values, pawn shop programs require careful specialty construction.
Inland Marine (Jewelers Block / Dealer Policy)Pawn shops hold pledged collateral — jewelry, electronics, musical instruments, tools, firearms, and other personal property — that is both high-value and frequently targeted for theft. Standard commercial property covers the pawn shop's own inventory. Pledged collateral (property accepted as security for pawn loans) must be covered separately under an inland marine policy or a dealers block policy that specifically covers non-owned property in the pawn shop's custody. The total value of pledged collateral can fluctuate significantly and the policy limits must reflect the maximum possible value on hand.
Commercial CrimePawn shops are high-crime-target retail establishments. Commercial crime coverage addresses burglary (break-in and theft after hours), robbery (armed theft during business hours), employee dishonesty (staff who steal from the cash drawer or from customer pledged goods), and safe burglary. Pawn shops with significant firearm inventory have additional ATF compliance obligations and specific security requirements that affect crime coverage eligibility.
Commercial General LiabilityCovers premises liability at the pawn shop — a customer who slips and falls on the sales floor, a visitor who is injured by falling display merchandise, or property damage to a customer's vehicle in the parking lot. GL for pawn shops must specifically address the firearm sales component if the shop sells firearms — products liability for firearm sales requires specific disclosure and may require a specialty endorsement.
Commercial PropertyCovers the pawn shop building (if owned), leasehold improvements, display cases, point-of-sale systems, security systems (cameras, alarms), safes and vaults, and the pawn shop's own retail inventory (items that have been forfeited and put on sale). Display cases for jewelry can cost $2,000–$8,000 each, and a pawn shop may have dozens. Safes and vaults must be separately scheduled at replacement cost.
Workers' CompensationPawn shop employees face robbery-related workplace violence risk — pawn shops handle cash and high-value merchandise and are frequent robbery targets. WC for pawn shops must address workplace violence injury in addition to standard retail WC exposures (lifting injuries, slip-and-fall incidents). WC classification for pawn shop operations (8017 — retail stores) covers counter staff and management.
Federal Firearms Dealer LiabilityPawn shops that hold a Federal Firearms License (FFL) and sell firearms as part of their business face specific liability for firearm sales — selling a firearm to a prohibited person, negligent entrustment claims, and post-sale firearm misuse claims. Specialty FFL dealer liability coverage addresses this exposure, which standard GL products liability may not fully cover.
ACORD 125 — Commercial Insurance ApplicationPrimary submission document for pawn shop accounts. Capture loan and sales volume, types of merchandise accepted (jewelry, electronics, firearms, musical instruments, tools), maximum value of pledged collateral on hand at any one time, safe/vault specifications, security system details (alarm monitoring, cameras, lighting), and prior theft/burglary claim history.
ACORD 126 — Commercial General Liability SectionRequired for GL. Disclose whether the pawn shop sells firearms — FFL status and firearm sales must be specifically disclosed. Describe the sales floor layout, number of employees, customer traffic volume, and any secondary retail activities (buy/sell without loans, gun transfers, jewelry repair).
→What types of merchandise does the pawn shop accept as collateral — jewelry, electronics, firearms, musical instruments, tools, sporting goods?
→Does the pawn shop hold a Federal Firearms License (FFL) and sell firearms?
→What is the maximum total value of pledged collateral (loaned merchandise) in the shop at any one time?
→What is the total value of own retail inventory (forfeited items for sale)?
→What safe or vault does the pawn shop have — what is the model, UL rating, and capacity?
→What security systems are in place — alarm monitoring company, camera system, after-hours lighting?
→Is the pawn shop in a building with other tenants, or a stand-alone location?
→What are the building construction type and age?
→Has the shop had any burglary, robbery, or employee theft claims in the last 5 years?
→What is the annual gross loan volume?
→What is the annual retail sales volume?
→Does the pawn shop buy and sell gold and silver — precious metals dealer?
→Does the pawn shop have a jewelry repair operation?
→What is the ratio of loan business to retail sales?
→Are all employees bonded and background-checked?
Complete pawn shop submissions in one workflow
AgencyAssist captures merchandise types, pledged collateral values, safe specifications, FFL status, security systems, and prior loss history through one intake link. ACORD forms generated automatically.