Inside This Article:
- A Southern California store and warehouse were recently targeted by thieves in separate incidents that involved $37,000 worth of Labubu dolls.
- Businesses that hold high-value or collectible inventory may be at higher risk for theft.
- The incidents highlight the importance of theft coverage under Commercial Property Insurance — a protection that is not included in all policies.
- Central station burglar alarm systems can help prevent and mitigate losses and are often required to obtain insurance coverage for theft.
More than a dozen boxes of stolen Labubus valued at about $30,000 were recently recovered by police in Chino, California. The highly sought-after dolls were stolen from a warehouse over multiple days and were recovered at a house in Upland, the Associated Press reported Aug. 12. The suspects in the theft, both under the age of 18, reportedly worked at the warehouse.
Nearby in Los Angeles County, police were investigating a separate incident in La Puente, where masked thieves stole about $7,000 worth of Labubu dolls from a retail store, BBC News reported on Aug. 10. The trending dolls, known for their distinctive sharp-toothed appearance, have gained significant popularity across the globe, often selling out in minutes where they are sold and leading to steep markups on resale sites.
“These incidents are not surprising,” said Sarah Daniel, Manager, Commercial Insurance, Burns & Wilcox, Dallas/Ft. Worth, Texas. “I can see Labubus being a high-target theft item, especially when you look at their resale value.”
Theft of in-demand merchandise can leave retailers and warehouses vulnerable to financial losses as well as disrupted operations. Having adequate coverage under Commercial Property Insurance is vital in these cases, said Andrew Chen, Senior Broker, Commercial Insurance, Burns & Wilcox, San Francisco, California.
“Business owners need to make sure that they have theft coverage on their policy,” Chen said, adding that many thefts today are increasingly sophisticated. “These criminals often know what they are doing and what they are going after.”
These criminals often know what they are doing and what they are going after.
Theft not covered on all policies
In 2023, 13% of small business owners said they experienced retail theft daily, according to Statista, and in 2022, U.S. retailers reported $112.1 billion in lost inventory, according to the National Retail Federation.
Theft would not typically be covered under a Basic Form Commercial Property Insurance policy, which only responds to a limited number of named perils, but is usually included under Special Form Commercial Property Insurance, Chen explained. “On the Special Form, everything is covered except what is specifically excluded in the policy,” he said.
In order to obtain Theft coverage, a business may be required to have a Central Station Warranty confirming a central station burglar alarm system is in place and active at the location. If a theft occurred while the monitoring system was inactive or accidentally turned off, coverage could be denied, Chen said.
Some business or warehouse owners may not realize their policy includes this requirement, Daniel added. “Business owners should check their policy and find out whether they are required to have any additional protective safeguards in place,” she said. “They should also ensure they have adequate limits for their Business Personal Property, especially if they are increasing their stock of certain items.”
‘Viral’ status could attract criminal attention
When a theft occurs, a company’s Commercial Property Insurance would generally help pay for the replacement of stolen merchandise but may not extend to its market value, Daniel pointed out. In the case of stolen Labubus, obtaining more inventory may be difficult, she said.
“Are you going to get the market value back on your policy or are you going to get what you actually paid for them? Policies vary, but that type of loss could be crippling to a business that was expecting to bring in the market value from selling an item,” Daniel said. “Labubus are hot now, but by the time you get to replenish your inventory, are they still going to be in demand?”
Are you going to get the market value back on your policy or are you going to get what you actually paid for them? Policies vary, but that type of loss could be crippling to a business that was expecting to bring in the market value from selling an item.
Insurance add-ons such as a Market Price Endorsement or coverage for Loss of Business Income may be helpful in these cases, Chen noted. This and other coverage considerations should be discussed with an experienced insurance broker, he said.
“In some cases, insurance carriers will only offer a sublimit for theft or they will exclude theft altogether,” Chen said, adding that coverage for physical damage that occurs during a theft should also be discussed. “Glass might be excluded from the policy, for example, but could be added on. A lot of times, thieves will use a stolen vehicle to break into a storefront, which can cause significant damage.”
In some cases, insurance carriers will only offer a sublimit for theft or they will exclude theft altogether.
Insurance coverage for theft and vandalism “usually go hand in hand,” Daniel said, “but business owners should make sure they know what is covered.”
When a retailer or warehouse is known to stock toys like Labubus or other viral sensations, this could put the business at greater risk of being targeted. This is especially true if a retailer advertises the day and time at which deliveries are expected, Daniel explained. “If the public knows that shipments come in on Thursdays, that is a big security concern,” she said.
If the public knows that shipments come in on Thursdays, that is a big security concern.
Separate coverage needed for inventory in transit
In May, CNBC reported on a “record surge” in cargo theft that includes organized criminal groups breaking into trucks, warehouses, and train cars — often using technology to make fraudulent invoices and divert cargo to criminals. Cargo thefts hit a record high in 2024, including a surge in this type of strategic cargo theft.
Although inventory in warehouses or stores can be protected by Commercial Property Insurance, products in transport to or from these locations would require a separate Inland Marine Insurance or Motor Truck Cargo Insurance policy, Chen and Daniel noted.
“Property coverage is usually limited to within 100 feet of the scheduled premises,” Daniel said. “If a business has an employee transporting or delivering inventory outside the premises, they want to make sure they are covered for that.”
According to Chen, expenses are increasing “throughout the entire insurance industry,” including the cost of materials and labor for repairs. As costs rise, it is even more important to ensure that your Business Personal Property limits and values “are correct and up to date,” he said. “Your limits should cover the maximum amount that may be needed at any one time over the year at that location.”
