Fine Art Insurance Policy Information
Fine Art Insurance. Maybe your business is a collector of paintings, sculptures and other types of fine art? Perhaps you are responsible for the transportation or set up or fine art collections.
Whether your organization owns or is in charge of fine art, there's no doubt that you want to ensure that it is properly protected. Works of art - especially if their one-of-a-kind or made by a world-famous artists - can be irreplaceable.
Commercial fine art insurance is available for:
- Historical Societies
- Museums & Institutions
- Private & Corporate Collections
- University Collections & Libraries
As an organization or business who is in charge of fine art, you want to be sure that these commodities are properly protected. How can you do that? By investing in a fine art insurance policy.
Fine art insurance covers commercial collections of every nature, including: fine art, jewellery and collectable objects with rates as low as $109/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked fine art insurance questions:
- What Is Fine Art Insurance?
- How Much Does Fine Art Insurance Cost?
- What Is Considered Fine Art?
- What Does Fine Art Insurance Cover?
- How Is Fine Art Valued For Insurance Purposes?
- What Does Fine Art Insurance Cover & Pay For?
What Is Fine Art Insurance?>
Fine art insurance is a type of insurance coverage that protects the value of fine art and collectible items. This coverage typically includes protection for theft, damage, loss, or destruction of the artwork.
Fine art insurance may be purchased by individuals, museums, galleries, or collectors and can be tailored to fit the specific needs and risks associated with the type of artwork being insured.
The insurance policy may also provide coverage for transportation, storage, and exhibition of the artwork. Fine art insurance is designed to provide peace of mind and financial protection for the owners of valuable works of art.
A fine art insurance policy would be a worthwhile investment for anyone who owns, handles, or cares for works of art that are considered rare or priceless.
If any of the following apply to you and you are an owner of or are responsible for fine art, you should strongly consider investing in this type of policy:
- A one-of-a-kind item that would be impossible or exceedingly difficult to replace
- An object that would experience a substantial decrease in value if it were damaged
- Delicate, fragile, original, or antique items
How Much Does Fine Art Insurance Cost?
The average price of a Fine Art Insurance policy for a small collection ranges from $109 to $259 per month based on; where the cargo is being picked up and transported to, types of cargo hauled, average load value, claims history and more.
What Is Considered Fine Art?
While what qualifies an item as "fine art" does vary, there is one standard that would qualify something as a work of fine art, and that is that the value of the piece exceeds the "ordinary function" of the material; in other words, a canvas that contains a work of art that was painted by a world-renowned artist - whether deceased or alive - would be considered a work of fine art, whereas a canvas that features artwork that was painted by an unknown individual or that has not be critically acclaimed in the art world would not.
Some examples of fine arts are:
- antique furniture
- rare books
What Does Fine Art Insurance Cover?
The coverage that a fine art insurance policy offers varies and depends on the specific insurer and the nature of the artwork; however, generally speaking, the majority of fine art insurance policies do pay for direct physical loss or damage to covered property but only when that loss is from a covered cause of loss.
Covered property is the property described in the declarations but only if it is fine arts owned by the named insured or fine arts that belong to others that are in the named insured's care, custody, or control.
For example, if the piece was damaged while in transit, by a storm, a fire, or any other perils, because it wasn't securely displayed, or if it is lost or stolen, a standard fine art insurance policy would cover the associated costs.
There are some exclusions, however; for example, most fine art policies will not cover damages that are associated with an act of war, pests or contraband.
Some fine arts policies also offer extensions to coverage including:
- Art Fair Cancellation
- Art Title Defense Cost
- Exhibition Cancellation
- Misrepresentation Defense Cost
It's important to speak with your insurance provider to find out exactly what a fine art policy will cover.
How Is Fine Art Valued For Insurance Purposes?
The limits for a fine art policy are determined by the value of the artwork in question; however, the value of artwork is often subjective. With that said, most insurance companies will use a set of standards to determine the limits for a policy, which may include:
- The market value of the piece
- The amount the piece was purchased for
- The estimated cost of replacing or repairing the item
- The value of the piece, as determined by an appraisal
As with any other type of insurance policy, the premiums that you can expect to pay for fine art coverage will depend on the limits.
Fine Art Insurance Underwriting Considerations
Objects of fine art should always have an independent appraisal to determine the appropriate value. The purchase price is important but may not have an actual bearing on an object of fine art's true value or market price.
Appraisals should be updated periodically because changes, such as the death of an artist, may increase the value or cause the value to appreciate. On the other hand, a flood of comparable items on the market may diminish or depreciate the item' value.
Fire and theft are the major cause of loss concerns and fire and theft systems and alarms should be in place when substantial values are involved. Sensitive environmental or atmospheric systems and alarms should be considered if the art is susceptible to damage from changes in temperature or humidity.
The degree of care in packing and unpacking objects of art in large part determines how well they fare in transit. Specialized moving and packing operations should be employed when handling and transporting valuable items.
Art located off premises should be documented and recorded and security at those premises should be adequate for the type of item involved and its value. Fraudulent acts and trickery can occur and there should be safeguards to prevent unintended delivery of art objects to criminals.
Security at off-site exhibits must be evaluated and appropriate guarantees obtained before consenting to exhibit. If a fine art object is given to another party on consignment, a signed consignment agreement should be required to eliminate any questions of its ownership and that party's legal responsibility for it.
Fine arts should be kept on or above grade level because damage from humidity and water occurs more frequently below grade. Lower levels of a building may be appropriate for other storage or for processing and refurbishing operations.
It is important to keep activities that involve heat and using flammable liquids well away from the main inventory. Flammables should be kept in proper containers in a well-ventilated area to prevent the build-up of fumes and away from combustible materials that can increase the chance of spontaneous combustion and fire.
What Does Fine Art Insurance Cover & Pay For?
Fine art claims can involve a variety of legal issues, such as authenticity disputes, copyright infringement, and damage to artwork during transit or exhibition. Here are some examples of fine art claims and how fine art insurance can help pay for the lawsuit:
Authenticity dispute: A collector purchases a painting that is claimed to be a work by a famous artist, but experts later determine that it is a forgery. The collector may file a lawsuit against the seller or auction house for misrepresentation or fraud. Fine art insurance can help cover the legal costs associated with this lawsuit, including attorney fees, court fees, and expert witness fees.
Copyright infringement: An artist creates a painting that is similar to an existing work by another artist, and the original artist claims that their copyright has been infringed. The original artist may file a lawsuit against the infringing artist for copyright infringement. Fine art insurance can help cover the legal costs associated with this lawsuit, including attorney fees, court fees, and damages awarded to the original artist.
Transit damage: An art gallery loans a valuable painting to a museum for an exhibition, but during transit, the painting is damaged. The gallery may file a claim with their fine art insurance to cover the cost of repairing the damage or compensating the owner of the painting. If the insurer determines that a lawsuit is necessary to recover the damages, the insurance policy can also cover the legal costs associated with the lawsuit.
Exhibition damage: A museum loans a valuable sculpture to an exhibition, but during installation, the sculpture is accidentally dropped and damaged. The museum may file a claim with their fine art insurance to cover the cost of repairing the damage or compensating the owner of the sculpture. If the insurer determines that a lawsuit is necessary to recover the damages, the insurance policy can also cover the legal costs associated with the lawsuit.
In each of these examples, fine art insurance can help pay for the legal costs associated with a lawsuit, which can be substantial. Without insurance coverage, collectors, artists, galleries, and museums may face significant financial losses if they are sued or if they need to file a lawsuit to recover damages.
Fine Art Insurance - The Bottom Line
If you are the owner or the handler of fine art, speak to a reputable insurance broker that specializes in fine art insurance coverage. An agent will be able to help you determine if this type of policy would be worth your while and if so, how to go about securing a policy and how much coverage you would need.
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