Art Dealer Insurance Policy Information
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 art dealer insurance are needed. To discover more, keep reading.
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.
Below are some answers to commonly asked fine art dealers insurance questions:
- What Is Art Dealers Insurance?
- How Much Does Art Dealer Insurance Cost?
- Why Do Art Dealers Need Insurance?
- What Type Of Insurance Do Art Dealers Need?
- What Does Art Dealer Insurance Cover & Pay For?
What Is Art Dealers Insurance?
Art dealers insurance is a type of insurance that is specifically designed to protect art dealers, galleries, and auction houses from financial loss due to damage or theft of artwork. This insurance can include coverage for the physical artwork itself, as well as any loss of income that may result from the damage or theft.
Some policies may also include liability coverage for situations where a customer is injured on the premises or an artwork is damaged during transit. Art dealers insurance can be tailored to meet the specific needs of the business, and can include coverage for a wide range of art types, including paintings, sculptures, prints, and more.
How Much Does Art Dealer Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small art dealers ranges from $37 to $59 per month based on location, size, revenue, claims history and more.
Why Do Art Dealers Need Insurance?
Art dealers need insurance to protect against potential losses or damages to the artwork they own or sell. This includes coverage for damage or loss caused by natural disasters, theft, or accidents. Insurance also provides protection for any legal liability that may arise from the sale or handling of artwork, such as disputes over authenticity or ownership.
Additionally, insurance can cover the cost of transporting and storing artwork, as well as the expenses associated with exhibiting artworks at galleries or art fairs. Overall, insurance helps art dealers mitigate financial risks and ensures the security and protection of their valuable assets.
Another important aspect of art dealer insurance is professional indemnity insurance. This type of coverage protects the art dealer in case of any professional mistakes or errors that may occur during the course of their business. For example, if a dealer incorrectly represents an artwork as being by a specific artist, they may be held liable for any financial losses incurred by the buyer as a result.
Art dealers also need liability insurance to protect against any potential injuries or accidents that may occur on their property or at an exhibition or event. This includes coverage for accidents that may happen during transportation of artworks, as well as any incidents that may occur on the dealer's property.
In short, art dealer insurance is essential for protecting against a wide range of potential risks and losses. It provides peace of mind and security for art dealers and their businesses, allowing them to operate with confidence and focus on their core business activities.
What Type Of Insurance Do 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 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 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 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.
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.
What Does Art Dealer Insurance Cover & Pay For?
Art dealers can be sued for various reasons, and having insurance can help protect them financially by covering the costs associated with legal defense, settlements, or judgments. Here are some examples of reasons why art dealers might be sued and how insurance can help:
Authenticity disputes: If a buyer claims that an artwork sold by an art dealer is a fake or a forgery, the buyer may file a lawsuit against the dealer. Art dealers can have insurance coverage for authenticity disputes, which can help pay for legal fees and costs associated with proving the authenticity of the artwork, or covering any potential damages awarded to the buyer if the artwork is found to be a fake.
Damage or loss of artwork: If an artwork is damaged, destroyed, or lost while in the custody of an art dealer, the owner of the artwork may sue the dealer for negligence or breach of contract. Art dealers can have insurance coverage for property damage or loss, which can help cover the costs of repairing or replacing the artwork, as well as legal expenses associated with defending against the lawsuit.
Copyright infringement: If an art dealer sells an artwork that infringes on the copyright of another artist, the original artist may file a copyright infringement lawsuit against the dealer. Art dealers can have insurance coverage for copyright infringement, which can help pay for legal defense costs and any damages awarded to the original artist.
Breach of contract: If an art dealer fails to fulfill their contractual obligations, such as not delivering artwork as promised or not paying an artist the agreed-upon amount, the other party may file a breach of contract lawsuit. Art dealers can have insurance coverage for breach of contract, which can help cover legal costs associated with defending against the lawsuit and any damages awarded to the plaintiff.
Fraud or misrepresentation: If an art dealer knowingly sells an artwork with false or misleading information, such as misrepresenting the provenance or condition of the artwork, the buyer may file a lawsuit for fraud or misrepresentation. Art dealers can have insurance coverage for fraud or misrepresentation claims, which can help pay for legal defense costs, settlements, or judgments.
In all these examples, having insurance can provide financial protection to art dealers by covering the costs associated with defending against lawsuits, paying settlements or judgments, and mitigating potential financial losses. It's important for art dealers to carefully review their insurance policies to ensure they have adequate coverage for the risks they face in their business.
Commercial Insurance And Business Industry Classification
- SIC CODE: 5999 Miscellaneous Retail Stores, Not Elsewhere Classified
- NAICS CODE: 453920 Art Dealers
- Suggested Workers Compensation Code(s): 8017 Store - Retail NOC
Description for 5999: Miscellaneous Retail Stores, Not Elsewhere Classified
5999 Miscellaneous Retail Stores, Not Elsewhere Classified: Establishments primarily engaged in the retail sale of specialized lines of merchandise, not elsewhere classified, such as artists' supplies; orthopedic and artificial limbs; rubber stamps; pets; religious goods; and monuments and tombstones. This industry also includes establishments primarily engaged in selling a general line of their own or consigned merchandise at retail on an auction basis. Establishments primarily engaged in auctioning tangible personal property of others on a contract or fee basis are classified in Services, Industry 7389.
- Architectural supplies-retail
- Art dealers-retail
- Artificial flowers-retail
- Artists' supply and material stores-retail
- Auction rooms (general merchandise)-retail
- Autograph and philatelist supply stores-retail
- Awning shops-retail
- Baby carriages-retail
- Banner shops-retail
- Cake decorating supplies-retail
- Candle shops-retail
- Coin shops-retail, except mail-order
- Cosmetics stores-retail
- Electric razor shops-retail
- Flag shops-retail
- Gem stones, rough-retail
- Gravestones, finished-retail
- Hearing aids-retail
- Hot tub-retail
- Ice dealers-retail
- Monuments, finished to custom order-retail
- Orthopedic and artificial limb stores-retail
- Pet food stores-retail
- Pet shops-retail
- Picture frames, ready-made-retail
- Police supply stores-retail
- Religious goods stores (other than books)-retail
- Rock and stone specimens-retail
- Rubber stamp stores-retail
- Sales barns-retail
- Stamps, philatelist-retail: except mail-order
- Stones, crystalline: rough-retail
- Swimming pools, home: not installed-retail
- Telephone stores-retail
- Tent shops-retail
- Trophy shops-retail
- Typewriter stores-retail
- Whirlpool baths-retail
Art Dealer Insurance - The Bottom Line
To learn more about the exact types of 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.
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
- Specialty Retail Stores
The retail industry is a vital sector of the economy, providing goods and services to consumers across the globe. It is also a sector that is constantly evolving, with new technologies and trends emerging on a regular basis.
Despite its importance, the retail industry is not without its risks. Retail businesses face a variety of threats, including theft, damage to property, and liability issues. These risks can have significant financial consequences for retail businesses, which is why commercial insurance is so important.
Insurance can provide retailers with protection against financial loss resulting from unforeseen events. For example, if a retail store is damaged by a natural disaster, insurance can help cover the cost of repairs and help the business get back on its feet. Similarly, if a retail employee is injured on the job, insurance can help cover their medical expenses and any lost wages.
In addition to protecting against financial loss, commercial insurance can also help retail businesses protect their reputation. If a retail business is sued or faces other legal challenges, insurance can provide financial support and legal representation. This can help to protect the business's reputation and maintain customer trust.
Overall, insurance is an essential component of a successful retail business. It helps to safeguard against financial loss and protect against potential legal challenges, which can be especially important for smaller businesses that may not have the resources to absorb these types of losses.
By investing in business insurance, retail businesses can ensure that they are well-equipped to handle the many challenges that come with operating in this dynamic industry.
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.