California Art Dealer Insurance Policy Information
California Art Dealer Insurance. Art dealers may purchase art to sell to end consumers, or they may act as brokers who negotiate on behalf of buyers or sellers.
Art dealers display and sell paintings, sculptures, statuary, and other types of artwork. The items may be owned by the gallery or on consignment from artists. The dealer may specialize in a particular period or style of artwork and offer appraisals.
Some provide facilities for art classes or studios on premises. Pickup, delivery, cleaning, framing, installation, or repair services may be offered.
Most art dealers specialize in a certain style, time, art form, or region, and grow their networks to build close relationships with artists, museums, and art collectors.
Art dealers have exciting, dynamic careers that frequently take them all over the globe in search of great pieces of art - and there is no doubt that dealing in art can be lucrative as well as highly rewarding.
Both self-employed art dealers and companies that deal in art also, however, operate in the shadow of numerous hazards that could destroy their business prospects and lead to financial ruin.
That is why it is essential to consider what kinds of California art dealer insurance are needed. To discover more, keep reading.
California art dealer insurance protects your business from lawsuits with rates as low as $37/mo. Get a fast quote and your certificate of insurance now.
Why Do CA Art Dealers Need Insurance?
Art dealers may be in a unique field, but they do face many of the same risks common to all business owners in addition to industry-specific hazards.
An art dealer's commercial premises, which may at any time host valuable works of art, may, for instance, be impacted by an act of nature - an earthquake, wildfire, lightning strike that sparks a fire, or a flood, to name but a few. Your business could fall victim to a robbery, a burglary, or an act of vandalism.
A customer or vendor could be injured on your premises, and if you have employees, the same holds true. Works of art that you had intended to sell may inadvertently be damaged during transport, or art you believed to be valuable may be discovered to be inauthentic.
A third party could file a lawsuit against your CA business for any number of reasons.
Any of these perils - as well as many others not covered here - have the potential to cause massive debt, or even bring your business to the brink of bankruptcy. When you are properly insured, however, your insurer will cover most of the costs, in turn allowing your business to recover from the setback.
The peace of mind you can only gain by knowing that you have done everything in your power to protect your business is the most important reason to carry California art dealer insurance.
What Type Of Insurance Do California Art Dealers Need?
The set of policies art dealers purchase ultimately depend on the factors that make their particular business unique - the size of the business, the value of the art they deal in, how many employees the company has, and the location of the main commercial premises will all play a role.
Because navigating the process can be complex, art dealers should consult a competent commercial insurance broker. Having said that, essential forms of California art dealer insurance that should be considered include:
- Commercial Property - This essential type of insurance covers your commercial premises - your physical building and most of its contents, excluding fine arts. Should your venue be impacted by perils such as acts of nature, fire, theft, or vandalism, a large portion of your repair and replacement costs will be covered.
- General Liability - This kind of California art dealer insurance coverage serves the purpose of covering your legal costs in the event that your business faces third party property damage or bodily injury claims. This may happen if a customer or vendor slips on a wet floor within your facility, for instance, or if your company's activities damage a property belonging to a neighbor.
- Fine Art Insurance - Fine art is not covered by standard commercial property insurance policies, so it is imperative that you obtain separate coverage for works of art. Art dealers will additionally need to purchase inland marine insurance with fine arts coverage, to protect valuable works of art while they are in transit.
- Workers Compensation - If you have employees, you will require workers comp to cover the medical bills of any employee who is injured on your premises or over the course of their job. These policies reimburse income the employee loses if their injury renders them unable to come back to work.
Selling fine art is a complex endeavor, and you may have further California art dealer insurance needs not covered here, whether in the form of cyber insurance, commercial auto coverage, or crime insurance.
Talk to a commercial insurance broker who is familiar with your field to discover how you can best shield your business from all major threats.
CA Art Dealer's Risks & Exposures
Premises liability exposure is high due to the number of visitors to the store. To prevent slips and falls, there should be good lighting. Paintings should be secured to walls and statuary securely placed so customers do not pull items down on themselves. Aisles must be adequate and free of debris with flooring in good condition with no frayed or worn spots on carpet and no cracks or holes in flooring.
Steps and uneven floor surfaces should be prominently marked. Sufficient exits must be provided and be well marked, with backup lighting systems in case of power failure.
Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls. If the business is open after dark, there should be adequate lighting and appropriate security for the area.
There should be a disaster plan in place for unexpected emergencies. Food and drink, including liquor, may be served at showings. Employees acting as bartenders should be trained to recognize the effects of alcohol. There should be a procedure in place to refuse service to patrons who are underage or intoxicated.
If caterers are used, they should have certificates of insurance with contractual responsibility for any spills and liquor-related incidents. If valet parking is provided, the dealer should be named as additional insured on the providing firm's policy.
If classes are offered, employees working with youth must be screened, including criminal background checks. If installation services are offered, customers' premises may be damaged.
Personal injury exposures include allegations of discrimination and from apprehending and detaining shoplifters, which may result in claims of assault and battery, false arrest or detention, unauthorized or intrusive searches, or wrongful ejection from the premises. Shoplifting procedures must be fully understood and utilized by all employees.
Products liability exposure is normally low. If the operation offers restoration services, a careful review of the type of work being restored and the values involved are necessary. Reproductions must be labeled as such.
Professional liability exposures exist if the gallery provides appraisals and/or authentication of artwork. The appraiser must be certified. All appraisals should be in writing with verification of how the age of the item, its condition, and its value was determined.
Workers compensation exposures are moderate due to employees standing for long hours, the use of computers, and stocking, which requires lifting, placing items on floors or shelves, or working from heights to display artwork. Continual standing can result in musculoskeletal disorders of the back, legs, or feet.
Trips, slips, and falls are common. When work is done on computers, employees are exposed to eyestrain, neck strain, and repetitive motion injuries including carpal tunnel syndrome. Lifting can cause back injury, hernia, sprains, and strains.
Employees should be provided with safety equipment, trained on proper handling techniques, and have conveying devices available to assist with heavy lifting. Shelves should be easily accessible for storage. Housekeeping in storage areas, especially during peak times, is vital in preventing trips and falls.
Repair work can result in cuts, burns, eye injuries, and respiratory ailments. Proper protection is necessary. Drivers of delivery trucks can be injured in accidents.
In any retail business, hold-ups may occur. Employees should be trained to respond in a prescribed manner. If employees travel internationally to attend shows and to meet artists, foreign coverage, including repatriation, should be considered.
Property exposures are high. Ignition sources include electrical wiring and heating and air conditioning systems plus flammables used in painting and cleanup. These must be properly stored, separated, and controlled. Welded sculpture, screen-printing, etching, spray-painted graffiti, and photography laboratories increase the exposure.
Most of the stock will not be covered by the business personal property coverage form so must be scheduled on a fine arts floater. Business interruption is moderate as appropriate backup facilities may not be available.
Crime exposures are from employee dishonesty and theft of money and securities. Background checks should be conducted on all employees handling money. There must be a separation of duties between persons handling deposits and disbursements and reconciling bank statements.
Money should be regularly collected from cash drawers and moved away from the collection area, preferably to a safe on premises. Bank drops should be made throughout the day to prevent a buildup of cash on the premises. Any traveling with expensive items should be tightly controlled.
Inland marine exposures are from accounts receivable if the dealer offers credit, bailees customers for items held on consignment belonging to others, computers to transact sales and monitor inventory, fine arts for owned paintings and statuary, and valuable papers and records for customers' and vendors' information.
Backup copies of all records, including computer files, should be made and stored off premises. The stock will include items owned and for sale, items held for sale on consignment, items loaned to the dealer, and items from the dealer's personal collection. Artworks are highly susceptible to damage from fire, smoke, and water.
A fire suppression system should be in place that will cause the least amount of damage while controlling any fire. Fragile items can be easily broken.
Theft is a concern, so proper security must be in place. The type of security will be dependent on the value of the stock on hand but could include physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department. Valuation can be a problem due to the age and rarity of some items.
The dealer should keep accurate records of the description and cost of each item purchased for resale to verify the actual cash value of missing, damaged, or destroyed artwork after a loss.
Goods in transit and off premises coverage will be needed if the dealer takes items to trade shows or loans items to other organizations for displays.
Business auto exposure is moderate as art dealers pick up artwork off-site and transport them to the store. They generally provide delivery services to customers, particularly when larger or more expensive items are purchased.
There may be a private passenger fleet available in order for owners or employees to call on customers at their home or business. All drivers must have a valid license and acceptable MVR. Vehicles must be regularly maintained with records kept.
California Art Dealer Insurance - The Bottom Line
To learn more about the exact types of California art dealer insurance policies you'll need, and how much coverage you should carry and the resulting premiums, consult with a reputable broker that is experienced in commercial art insurance.
California Economic Data, Regulations & Limits On Commercial Insurance
If you are an entrepreneur and you considering having your operations located in California, it's essential that you have a full understanding about the economy of the state, as well as the regulations and limits that are in place for commercial insurance.
If you are considering opening up a business in the Golden State, you first want to make sure that it is a sound location for your operations. That means that you should understand some key information related to the state's economy, as well as the types of insurance coverages that businesses are legally required to carry.
Economic Trends For Businesses In California
In terms of job creation, the state of California exceeds rate of job growth in the United States; however, as the state's metropolitan areas are reaching employment capacity, job growth is starting to slow. In 2017, the rate of growth was 2.1 percent, which is the slowest rate of growth since 2011; but it is still expected to increase by 1.8 percent by the end of 2018, and 1.2 percent by the end of 2022.
In the month of April, the unemployment rate in California dropped to 4.2 percent, which is a record low. This unemployment rate is expected to remain consistent for the rest of the calendar year; however, it's forecasted that the rate will start to increase in 2022.
The strongest labor market in the state is in the Bay Area, where the unemployment rate was 3.4 percent in 2017. Southern California follows, with an unemployment rate of 4.5 percent in 2017. In the Central Coast region, the rate was 5.4 percent and in the Central Valley, it was 6.6 percent. While the unemployment rate is considered high in these areas, they have decreased dramatically over the last 12 month period.
The industries that are expected to see the most growth in CA include:
- Information Technology
CA Commercial Insurance Regulations And Limits
The California Department of Insurance regulates insurance in the Golden State. In the state of CA, commercial liability insurance is not required; however, since the state does not cap rewards for liability law suits, business owners are wise to invest in this type of coverage. The amount of coverage recommended varies depending on the size of the business and in the industry.
Workers' compensation insurance is the only type of coverage that business owners are required to have. This applies to any organization that employs a salaried or hourly staff, even if that staff only consists of one employee. Furthermore, if an employee is injured or becomes ill as a result of work, business owners must pay for CA workers' comp benefits.
Additional Resources Retail Insurance
Read valuable small business retail insurance policy information. In a retail business, you need to have the right type of commercial insurance coverage so that your store, employees, and inventory are protected.
- Adult Novelty
- Antique Dealers
- Appliance & Electronics Store
- Army Navy Surplus Stores
- Art Dealers
- Art Gallery
- Arts & Crafts Supply Stores
- Bicycle Shop
- Boat Dealers
- Book Store
- Bridal Shop
- Candy Confectionery Store
- Carpet Store
- Cell Phone Stores
- Clothing Store
- Collectibles Memorabilia Store
- Consignment Stores
- Convenience Store
- Cosmetics Store
- Costume Stores
- Dry Cleaning
- Embroidery Services
- Equipment Rental
- Fabric Stores
- Fish Markets
- Flea Markets
- Funeral Home
- Furniture Store
- Gift Store
- Greeting Card Stores
- Hardware Store
- Harness & Saddle Shops
- Home Improvement Store
- Infant, Baby & Children's Clothing Stores
- Jewelry Store
- Lamp Stores
- Lingerie Store
- Luggage Store
- Meat Market & Butcher Shop
- Men's Clothing Stores
- Music Store
- Office Supply Store
- Paint & Wallpaper Store
- Pawn Shop
- Pet Store
- Pharmacy Liability
- Plumbing Supplies Fixtures Store
- Poultry Dealers
- Rent To Own Stores
- Scrap Metal Dealers
- Sewing Store
- Shoe Store
- Sporting Goods Store
- Stationary Store
- Thrift Store
- Ticket Agency
- Tire Store
- Tobacco Store
- Toy Store
- Travel Agency
- Trophy Stores
- Tuxedo And Formal Wear Rental Store
- Vending Machine Operators
- Wig Store
- Women's Clothing Stores
Retail stores are susceptible to premises liability claims because of customer traffic, but large department and specialty stores are more susceptible than most.
All retail stores have significant property exposures. The on-hand stock represents a considerable investment, but the amount on hand fluctuates seasonally. For this reason, physical damage insurance on this property must be arranged carefully. When the insured occupies a non-owned building, insurance coverage must be arranged for the insured's interest in extensive improvements and betterments made to the premises.
Crime insurance, in the form of employee theft and money and securities coverage, is also very important.
The businessowners policy was designed with retail exposures and operations in mind. For this reason alone, it should always be the first type of package coverage to consider. However, for those risks not eligible for the business owners policy program, the commercial package policy (CPP) is a practical and convenient way to combine a number of coverages into one policy.
Retail businesses generate income through interaction with customers. This interaction is also how a customer can sustain an injury and then sue the retailer for damages. Hazards, exposures and operations both on premises and off are important and must be covered, but liability the retailer may incur because of the merchandise sold must also be considered and insurance protection arranged.
Inventory or stock is the major property exposure for most retail operations. Because stock values tend to fluctuate or have significant peaks at certain times of the year, value reporting or peak season valuation options should be considered. Business income coverage, including business income from dependent properties coverage, may mean the difference between a retail operation staying in business or being forced into bankruptcy following a loss.
When the insured occupies a non-owned building, insurance coverage must be arranged for the insured’s interest in extensive improvements and betterments made to the premises.
Most retail businesses offer endless opportunities for a variety of criminal activities. For this reason, the coverages needed must be carefully evaluated. Holdup and robbery losses may be the most obvious concerns but employee theft, fraud and counterfeit money losses are also serious issues that cannot be dismissed.
Retail businesses are gaining greater exposure to international issues because of the growth in sales via the internet. As these sales increase, the added exposures faced by these retailers must be evaluated. While their operating horizons are expanding so are their potential loss exposures.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income and Extra Expense, Equipment Breakdown, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Building, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Computer Fraud, Forgery, Bailees Customers, Goods in Transit, Jewelers Block, Cyber Liability, Employment-related Practices, Business Auto Liability and Physical Damage and Stop Gap Liability.
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