Galleries, museums protect their collections with fine art insurance

Gallagher, a Chicago-based insurance brokerage with an office in Cleveland, covers all facets of the fine arts industry, from traveling exhibitions to insuring a painting’s value during its restoration. Collection preservation is available to art galleries as well as corporations, universities, and non-profit organizations.

Risk management programs encompass property and casualty insurance, as well as advising around natural disasters and other potential exposures. Pricing depends on the strength of the collection, institutional security, environmental conditions, and a host of other factors.

Ellen Ross, managing director of fine art and jewelry at Gallagher, said the biggest hurdle a museum faces is getting the most accurate collection information possible to an underwriter. This goes for established institutions and organizations that have just entered the art world.

“There’s a lot of capacity in the market, so there aren’t any real challenges outside of that underwriting information,” Ross said. “For institutions, it’s about tweaking their alarm system or making sure they have redundancy in environmental controls. Just look at the risk and say we can get you the assurance, but we can get you a more competitive schedule if you change those things.”

Art insurance evolves around changing industry needs, Bidwell said. Contemporary art galleries with digital files or videos at hand are covered if damage is caused to the equipment with which the art is presented.

Artist intent can play a role in coverage, as some artists are comfortable with transforming or transitioning their pieces over time.

“Some artists are fine with their art fading, or pieces that may not be firmly applied (to a piece) and fall off,” Bidwell said.

Art industry standards are naturally designed to protect objects with the utmost care, said CMA’s Morasco. Museums will partner with professional shipping companies that employ handlers and drivers trained in packing, installing and transporting artwork. Companies also provide transportation, usually air-conditioned trucks with anti-vibration suspension.

To minimize risk and the resulting potential for claims, only one person should ever move a work of art. Rather, it should be moved in pairs on viable, carefully inspected gear, Morasco said.

“When moving art inside the museum, it’s about having a plan ahead of time,” she said. “You will travel in a group and ensure the crate and trolley are secure as you move them around the building.”

Paintings and sculptures are not the only objects protected by insurance. Most companies offer “fine art and cash” coverage, which applies to library and archival materials, gemstones, antique furniture and more.

Appraisals are carried out by internal staff, usually starting with the curatorial department or a contracted art appraiser. Assurance around collections is determined by current art market sales or auction values, as well as their overall cultural significance.

While most institutions don’t have to worry about items being destroyed by flying pastries, it’s still essential to cover all possibilities.

“Know how to mitigate risk and make sure those standards are in place,” Morasco said. “Like getting a shipping company with a great reputation – there will be little risk in that case.”

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