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Liability of Art Handlers and Fine Art Insurance Interview Part 3

what is art insurance

By Susan Kendzulak. Fine Art Expert

Susan Kendzulak is an artist and writer based in Asia. Read more

Fine Art at conducted a 3-part interview with several leading art insurance and art handling experts. This is the last part and focuses on the specifics of art insurance.

Two art handlers and four art insurance experts were interviewed.

The art insurance experts include Cees Kortleve. a Holland-based insurance broker and director/owner at CK Consultancy ; Nicholas Reynolds. Virginia-based Vice President of Berkley Asset Protection Underwriting Managers (A W.R. Berkley Company) ; Alessandro Brenna. Milan-based Fine Art Senior Underwriter at Synkronos Italia Srl – MGA ; and Brian Flood. New York-based Vice President at The Flood Group, LLC and author of Wealth Exposed .

Q: Let’s go into depth about art insurance. What is art exhibition insurance?

Cees Kortleve: An art exhibition insurance covers physical loss of or damage to the loans to the exhibition usually ‘nail-to-nail’. Nail-to-nail can be defined as: from the moment a start is made on the measures for preparing the object for the transit to the venue, during the period of stay in the venue and the transit from the venue to a location intended by the lender.

Nicholas Reynolds: Exhibition insurance insures objects of art while on exhibition: it typically covers the objects on a "wall to wall" basis, that is from the time the artwork is removed from its normal place, through the exhibition venue(s) and transits, in between, until returned to its normal place.

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Alessandro Brenna: The Company is obliged to pay compensation for all direct material damage to the insured works of art (the insured items) that occur during the validity period of the insurance cover.

Usually the guarantee applies “from nail to nail” and it starts from the moment in which the insured items are removed from their normal location to be prepared and/or packed for transportation to locations in which insured exhibitions take place, as defined in the Policy Sheet. The insurance continues to be applicable during the ordinary course of trips, including any in transit storage, as well as the exhibition period.

The guarantee also includes the activities of collocation of the insured items in the exhibition premises and activities related to removal from the places they have been stored to be prepared and/or packed for return trips.

Insurance cover expires when they are returned to their normal collocation or in any case when they are returned to the places from which they were originally removed, which are indicated by the Contracting Party when the risk is presented to the Company.

Usually  the Company is responsible for all direct material damage to the items insured caused by any accidental or malicious events (including theft, robbery and acts of vandalism) that are not expressly excluded.

Extended risks as Catastrophic Events as Earthquake, Flood, Storms, Hurricanes and the Terrorism risk are included ad per specific request by the Insured.

Waiver of Subrogation is usually given against the Contracting Party, the Insured, Carriers, Forwarders, Installers/Preparators, Exhibition Organizers and their employees.

As per specific request the cover could be extended to cover the fraud of the Assured and the misconduct of the Insured/Assured and their employees.

It is impossible to talk about prices as there are many different aspects to be taken in due consideration.

Brian Flood: These companies include

Chubb, AXA Art Insurance, Lloyd’s of London, Travelers.  Coverage can be provided wall to wall. In other words from its removal at its original location to another destination and/or return to its original location. Most specialty policies are offered on an “All Risks” basis. Policies typically include specific exclusions so it is important to know the exclusions, as some exclusions can be negotiated with the insurance company. Cost varies based on the value of the work, security at the exhibition venue, duration the work is on exhibit, prior claim history of the exhibitor.

Q: What does art insurance typically cover? Shipping, customs, theft, damage?

Kortleve: Basically an art exhibition insurance is an ‘all risks cover’ = physical loss of or damage to the object is covered whatever its cause, unless an exclusion is applicable. The number of exclusions is very limited.

Reynolds: Coverage is usually for all risks of physical loss or damage, with some common exclusions (wear and tear, gradual deterioration, moths, vermin, war, nuclear).

Q: What is the price range?

Kortleve: The price depends on various matters like:

  •  Kind of object. You can imagine the risks concerning china or glass differ from paintings or bronze statue. 
  •  The transits. For example the pricing differs if an object comes from a location in the same town or from the other end of the world. 
  • The period of the exhibition. It is obvious that the premium for the period of stay in the venue will differ if the exhibition is two months or six months. 

Reynolds: Cost depends on type of objects, value, number of venues, duration, number of transits - there are a lot of moving parts.

Q: When there is no institutional support, should independent/freelance curators get art exhibition insurance for their exhibitions?

Monte Martin: There is not enough money/opportunity in independent/freelance curators that usually the independent/freelance curators is also an artist or works for a gallery or a museum and this is something they are doing on the side, so it is very unlikely they would have the means to get insurance, so that is why they put in their form that the artist signs, that they are not responsible for damage or theft because they do not have insurance.

Kortleve: The installers/preparers should protect themselves through waiving liability through their delivery conditions.  What an artist can do depends on the specific situation. Either the owner/lender or the borrower should get an insurance for the loans. If the lender takes care of the insurance usually the borrower have to pay the premium, etc.

Reynolds: It all depends on the agreement between the curators and the owners. I can't stress enough the importance of agreeing in writing who is responsible for what. If the owners of property are responsible for insuring their objects (by written agreement) the curators need not, but should still get a waiver of subrogation from the property owners insurance.

Brenna: Yes they should, anyway.

Flood: Curators need to discuss with artists, galleries, foundations and others who will be responsible for insuring the artwork. Insurance coverage is recommended if the independent/freelance curator bears the responsibility for the work once it leaves the artist's possession until its return.  Once again a contract specifying these details is the first line of defense in the event of damage to a work.

Interviews conducted May 2014.

Category: Insurance

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