The fine art of insurance

The chances of artworks getting damaged, stolen and lost are real. This can happen due to natural causes or as a result of deliberate acts, and yet, there isn't much awareness about art insurance.

Art insurance remains an area that is often neglected by private art collectors and also institutions which, in fact, may have sizable art collections. The chances of artworks getting damaged, stolen and lost are real and this can happen due to natural causes such as floods, earthquakes and accidents, or as a result of deliberate acts. Yet, insurance for art is an underrepresented area. Household insurance may cover art up to a certain value, but for higher-value art, it is advisable to maximise coverage with an art insurance policy.

Incidentally, insurance for artworks can run into huge sums and is directly proportional to the value of the art and the collection.

For instance, Raphael’s artworks for an exhibition in Italy were collectively insured for four billion Euros against ‘theft, vandalism or other damages’. Therefore, depending on the value of individual or corporate art collection, the coverage can be taken.

There are two kinds of insurance policies, which are useful to consider — in transit and on site insurance. Both of these help in mitigating risk — the first would cover any loss, theft or damage while the artwork is being transported and the second offers a comprehensive insurance while the art is on display or stored at a site.

Read the fine print

There are a limited number of insurance companies that offer an exclusive art insurance policy. It would be best to read the fine print and find out the kind of coverage, terms and conditions it offers and compare the options. Don’t be afraid to ask questions and to negotiate a better deal. You could also look for add-ons that may not be covered by default, but by increasing the premium marginally, greater coverage can be obtained.

For instance, a wall-to-wall policy will typically ensure coverage during packing, transit, storage, installation and on-site display for a certain period of time (say, 15 days). But, by negotiating a better deal or by slightly increasing the premium amount, coverage for a longer tenure can be obtained. This largely depends on the insurance company and the third party broking the deal. Again, shop around to find the right policy and more importantly, a specialist and credible art insurance company. Imagine having coverage for your art, but in case of a genuine claim, the agency refuses to reimburse for loss or theft, or pay for the restoration. It is critical to be clear about what is covered and what the specific exclusions are in the insurance policy. It is also essential to know what papers and documents are required to file a claim.

To insure art collections, some of the documentations required are proof of ownership, purchase receipts, provenance and authenticity, and valuation of the artworks. This is another reason why all documents pertaining to art purchase and its value must be carefully documented and preserved. Similarly, the appraisal of the collection must be taken up periodically to update the valuation amount.

The author is a Bangalore-based art consultant, curator and writer. She blogs at Art Scene India and can be reached on [e-mail]

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