I sent 50 slabs to a major Instagram consignor. Two weeks later, news broke: they were insolvent, accounts frozen, owner missing. My cards were sitting in their locked warehouse, now controlled by a bankruptcy trustee. I called my insurance to get paid for the “loss.” They told me, “It’s not lost. We know where it is. It’s a civil legal matter.”
Key Takeaways
- Theft vs. Conversion: If the consignor steals them and runs, it’s theft (covered). If they go bankrupt and assets are frozen, it’s a financial/legal dispute (often not covered).
- “Entrustment” Exclusion: Many policies exclude loss when you voluntarily entrust items to others for sale.
- Bailment Laws: Legally, your cards are not the consignor’s assets. You have to prove ownership to the court to get them back.
- Specialty Coverage: Some top-tier policies (CIS, Wax) specifically cover “Consignment” and “Conversion” (theft by the person you trusted).
The “Why” (Possession)
You gave them the cards. It wasn’t a break-in.
“Exclusion: Dishonest or criminal acts by any person to whom you entrust the property for any purpose.”
The Investigation: Protecting the Shipment
I checked how to insure consignment risk.
1. Rely on Consignor’s Insurance
- Risk: Extreme. If they stop paying premiums, their policy lapses. You are exposed.
2. Homeowners Policy
- Result: Denied. Entrustment exclusion blocks this.
3. Specialty Policy with “Entrustment” Coverage
- Result: Covered. They pay you the market value, then they use their lawyers to fight the bankruptcy court for the cards. This is worth every penny.
Comparison Table
| Scenario | Standard Coverage | Specialty Entrustment Coverage |
| Consignor Warehouse Fire | Covered | Covered |
| Consignor Robbed | Covered | Covered |
| Consignor Steals/Bankrupt | Denied | Covered |
Step-by-Step Action Plan
- UCC-1 Financing Statement: For very high value consignments ($50k+), file a UCC-1. This puts a public lien on your specific items, putting you ahead of other creditors in bankruptcy.
- Read the Contract: Does the consignment agreement say “We insure your items”? If not, don’t send them.
- Keep Your List: You need an exact list of serial numbers sent. Without it, you can’t claim your specific slabs from the pile.
FAQ
Can I go break into the warehouse to get them?
No. That is burglary. You will go to jail.
[IMAGE: Graphic showing the flow of cards to consignor -> Bankruptcy Court -> Insurance Payout]