Category Archives: Art Gallery Insurance

Artwork in Transit; Managing the Risks

The top risks art collectors might face surprisingly doesn’t include theft. In fact, its art that’s on the move that poses the biggest risk. A large proportion of art claims are derived from transit losses. Private collectors enjoy lending, particularly as exhibitions in major institutions can increase value, that’s all very well until something goes wrong.

The movement of art is massive, now art is transported coast to coast, internationally or just to your winter home or local Gallery. When handling artwork, packing for transportation is a top concern for insurance carriers.

Many policies list as a condition, professional packing, meaning it must be packed as someone in the industry would pack it, safe, secure and protective from breaking if possible.

If you use a transportation service, either a fine art mover, a local mover, or common carrier, you must verify if they have or offer Insurance, what are their limits, conditions and the cost of the coverage. Insurance carriers differ and may have restrictions or limitations while your valuables are on the road, on a ship, or in air transit. The most common, efficient and safe way of moving art over long distances, domestically or internationally is by air transport, but it is very common to move the work yourself, so make sure your policy covers self-conveyance.

Some art transporting choices such as those offered by, United Parcel Service (UPS), DHL, Federal Express (FedEx), and other private art handling companies or commercial air freight carriers have limitations on coverages, territory, and deductibles. Keep in mind that while these are services used for fragile and non-fragile fine art, things happen within their control and outside of their control. Looking to your own insurance policy for protection is the right way to limit your financial losses and the quickest way to have the claim settled.

Artists, art dealers, and institutions use these Art transport services regularly, but Insurance, in particular, is the gray area in which most misunderstandings occur. Pay close attention to the bill of lading and understanding the fine print. The standard form limits the exposure of a claim on the art to weight, not value.

Our policies are written either as a schedule or market value less a percentage. Either way, your art will be protected while in transport. Caution, it’s important when securing transit art insurance to add extra days of transport for the unknown delays. Also note the declared value placed in customs forms or the bill of Lading is usually not used when settling a claim but look for wording which would specify to the contrary.

According to FedEx, “shipments (packages or freight) containing all or part of the following items are limited to a maximum declared value of $500: Artwork, including any work created or developed by the application of skill, taste or creative talent for sale, display or collection.

This includes, but is not limited to, items (and their parts) such as paintings, drawings, vases, tapestries, limited-edition prints, fine art, statuary, sculpture, collectors’ items, customized or personalized musical instruments, Film, photographic images, including photographic negatives, photographic chromes and photographic slides.

Any commodity that by its inherent nature is particularly susceptible to damage, or the market value of which is particularly variable or difficult to ascertain.”

According to UPS, articles of “unusual value” are prohibited from being offered for shipment. This definition explicitly includes “works of art.” As the November New York-based auctions ended and Art Basel Miami Beach began, for collectors buying and selling art no doubt demanded lots of their attention, they also should be thinking about keeping their art safe and properly insured as it moves between locations.

With the expansion of the global art market, risks increase. To discover a larger number of buyers, auction houses and art dealers often display art at multiple locations, including a growing number of art fairs around the world like Art Basel. The high volume of art exchanging hands increases the risk of improper handling and accidental damage and therefore increases the number of fine art insurance claims.

You should know where your art will be stored while in the possession of art dealers or auction houses. This is critical. For example, many consigned works were stored in art gallery basements in Chelsea during Hurricane Sandy, leaving many damaged. Art galleries may also store artwork at an off-site storage facility. Being notified before your piece is moved from one location to another is also a precaution and obtaining confirmation on how it will be packed and transported will help to ensure a smooth consignment process.

Don’t presume that the auction house, gallery owner, art dealer, or shipping company with possession of your artwork has insurance for its loss, theft or damage. It’s very important to have your own fine art policy. Collectors should always consult with an insurance agent. The agent can tailor a policy to a specific collector and discover any special provisions in the collector’s fine art policy.
No matter what risks they face, creating an insurance policy for an art collector requires one-on-one consultation since every art collection is unique, no two collectors are alike and no two collections are alike.

Collectors and their advisers would be wise to work with knowledgeable insurance brokers like Bernard Fleischer & Sons Inc.  that can guide you in obtaining the right fine art insurance for your unique requirements. For more info visit www.artinsurancenow.com and live chat with us or call us at 800.921.1008

Displaying & Selling Exhibitions! Owned, Consigned, Renting, Sold!

Does your Art Dealer policy cover you?

Not all Art Dealer policies do. The reality is most art dealer insurance forms exclude or limit coverage important to your business operations.

Those policies either specifically exclude artwork on consignment, off premises, at exhibitions, and in transit. Fortunately ArtInsuranceNow.com | Bernard Fleischer & Sons Inc. offers coverage with policies designed specifically around the conditions of the Art Dealer.

Unlike typical Dealer Policies, ours are designed specifically to the unique circumstances around your business. We will work with you to help design a policy that fits your budget, exposures, and style.

Our services also include polices for Galleries, Private & Corporate Collections, Museums, Curators, and Artists.

If you have valuable artwork in your possession, you should speak with us about adequate coverage. Fine Art Coverage is unique in nature, we work with many Insurance Companies to help place broader, or special coverages to satisfy your requirements.

Recent news out of the insurance industry suggests rates are moving higher. This makes it a prime opportunity for us to review what you currently have and review your business exposures. Contact us today!

Call us at 800-921-1008 to discuss your particular situation or for a direct quote apply below.

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Artist Studios Need Insurance Too

Many artists neglect to insure their practice because they mistakenly believe they’re already covered by a homeowner or rental policy—which are strictly limited in coverage to assets that aren’t considered part of a business. (Sorry, but at least in this case, your art, if it’s for sale, is considered a business.) Sometimes, insurance riders—essentially add-ons to a general policy—can be purchased to cover works of art or business practices, but an insurance brokerage like Bernard Fleischer & Sons Inc. / ArtInsuranceNow.com concentrates in the more complicated policies that art insurance typically requires. Our agency is experienced at navigating provenance and the complicated methods for valuating works of art and a familiarity with insuring studios and art collections.

 

Other artists hesitate with insurance because they’re unsure at what point a work of art is technically finished—at what point it stops being a conglomerate of a couple hundred dollars’ worth of material, and starts becoming a valuable “piece.” Fortunately, in this case, the insurance industry is largely unconcerned with such philosophical questions. Generally speaking, insurance adjustors will use an artist’s past sales to determine valuation. If you sold a similar painting for $1,000 (and can provide legitimate documentation), expect a valuation of about $1,000, unless you’ve started working with precious metals.

 

Certainly, the most tragic losses in the event of a disaster are those of human life. Second to that, for many people in the arts, are cultural artifacts. Therefore, it’s important to insure our cultural legacy. Meanwhile, insurance companies can feel very far removed from the arts—with their talk of “assets”—and scare collectors, gallerists, and, yes, even artists, from maintaining proper insurance coverage.

 

We at Bernard Fleischer & Sons Inc. / ArtInsuranceNow.com speak the language of the arts as well as insurance and can bridge the gap between the art community and the insurance industry to protect the legacies of the collector, gallerist, museum and artist.

Visit us at www.ArtInsuranceNow.com to learn more or call us at 800-921-1008 to speak with someone who can help with your particular needs.

As Art Basel Miami 2016 approaches, we look at the necessity of a good art insurance policy.

artbasel-miami-beachArt Basel, the international art fair with three shows staged annually in Basel, Miami Beach and Hong Kong. The shows offer parallel programming produced in collaboration with the host city’s local institutions. Art Basel provides a platform for galleries to show and sell their work to collectors, museum directors and curators. The 2015 show in Miami presented 267 leading international galleries from 32 countries. Over five days the show attracted 77,000 visitors including private collectors and directors, curators, trustees and patrons of nearly 200 museum and institution groups. The show hosted first-time collectors from Cambodia, Ethiopia, Nicaragua, Romania, Togo and Zimbabwe. That’s a lot of art moving around and collectors Art policies should cover Art, when purchased, on consignment and in transit, it’s about knowing your coverage situation before it’s too late.

art-basel-miamiThe transportation of art is a tricky thing, and as fine art transportation insurance leaders we can tell you exactly what you require to know so that your insurance program will be effective and  cover you properly.  Insurance coverage during transportation, installation and exhibition of irreplaceable works of art, antiquities, and memorabilia isn’t optional and the best way to obtain the finest coverage is to visit artinsurancenow.com or call us at 800.921.1008 to speak with a knowledgeable fine art broker that can advocate for you in seeking the best possible insurance terms.

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5 Things Every Collector Needs to Know about Art Insurance

anFor many of us, amassing a robust collection of works by the artists we love is more a dream than a reality (though startups like Art Money are working to provide interest-free loans that should make buying art more manageable). But for emerging collectors and seasoned vets alike, the actual purchase of a piece is only the beginning of what it means to actually own art. Though not flashy, art insurance is a crucial part of collecting. It ensures that, should an artwork be damaged, it can be repaired or, in the case of a total loss, some kind of remuneration can be provided. So what do you need to know about art insurance? We sat down with Robert Pittinger, senior vice president and director of underwriting at AXA Art Americas Corporation, to get some helpful tips.

Know the Process

When a collector buys specialty art insurance, they’ll work directly with a broker who can assess the collection and determine what policy the collector might need. That broker, in turn, works directly with the insurance companies to find the right fit. A common misunderstanding of the process, Pittinger says, is that “collectors confuse the broker with the insurance company.” It’s helpful to know that “the role of the broker and the art insurer complement one another; however, the roles themselves vary and they are different. A specialized fine art broker is an advocate for the collector in seeking the best possible insurance terms for their clients.” As an insurer, AXA itself works with a select group of fine art brokers.

Keep Documentation

The first step toward getting insurance is—unsurprisingly—to determine what is going to be insured and for how much. To this end, documentation is key. “One of the biggest things is that the collector needs to have all the documentation for their collection before they go to the broker, because the broker has to have a very thorough understanding of the price of the collection,” Pittinger says. When approaching a broker, collectors should have a list of all the works, descriptions, invoices of sale prices, the purchase dates, and subsequent appraisal prices.“The collector’s management of their collection is critical, whether they have an online management system or a spreadsheet or they have manuals with all the documentation and their appraisals—that is a critical part of purchasing the insurance,” Pittinger says.

Assess Your Needs and Options

All this information is important to provide to the broker so they can determine what insurance is best for you. Though most collectors who need insurance already have it, some collectors think they’re covered by everyday, run-of-the-mill homeowners insurance. And they can be. But, as Pittinger notes, “A homeowner package policy generally is an add-on coverage. It doesn’t go into detail.” Homeowners insurance that covers art might have high deductibles, might not cover a collection across multiple houses, or might not cover the work during transit. That last one is a particularly sticky issue because “any time a collector moves their art, there is increased risk of damage,” Pittinger says. “That is the number one cause of loss for the insurance industry that specializes in art insurance.”

All this is why, for collections larger than just a few items, Pittinger recommends specialty art insurance. Even lower-priced works and emerging collections can receive insurance: For pieces priced as low as $2,500, AXA offers a 12-month policy of $75, with a minimum premium. Generally, however, it is hard to say exactly how much art insurance costs—it depends on too many factors. “Art insurance is very reasonably priced compared to other types of insurance,” Pittinger says. “The price range varies depending on the type of works, the size of the collection, security, where it is kept, if it is in a fine art storage warehouse or in their home or in a museum—all those factors go into pricing a fine art collection.”

Stay Up to Date and Be Careful

Broadly, in the event of damage, an insurance policy pays out in one of two ways: Either the policy will pay a set, agreed-upon amount determined by the insurer and the collector in advance, or the policy will pay out based on the work’s current market value. Pittinger says collectors opting for the predetermined payout structure may do so for a number of reasons, including peace of mind so that they “wouldn’t have to worry about substantiating the value of the works” in the case of damage. Agreed value can also move up and down over the life of a policy if the collector decides to get the work reassessed.

Current market value is exactly what it sounds like: The work is insured for its current value if that figure exceeds an agreed value. “But the important thing to remember is there would be a restriction—the company would by no means pay more than the total limit of the policy,” says Pittinger. In other words, if a collection is insured for $10 million total, and one work that has radically increased in value is damaged in excess of $10 million, the insurance would still not pay more than the total cap.

Be a Smart Buyer

One final note: Do your research. Make sure you get a full condition report prior to purchase. “It’s also critical that the collectors be careful with the provenance of the piece to make sure there’s not a gap in the ownership that could come back to haunt them later,” Pittinger says. If there is an issue and the work is seized for, say, having been looted by Nazis, insurance typically won’t cover that turn of events (there are, however, some specialty insurers that would protect against such loss with what is known as title insurance). So when it comes to art insurance, the old adage “buyer beware” certainly still applies.

—Isaac Kaplan

BY ISAAC KAPLAN

 

 

For a quote apply here or call us at 800.921.1008

Iconic Muhammad Ali print stolen from museum.

The Print, which was stolen while the museum was open to the public depicted Ali in a classic boxing pose painted in the brilliantly colored, expressionist style that LeRoy Neiman was known for. Brazen thieves ripped the print from the wall even with security cameras watching, It’s important to understand the value of art insurance and protect yourself by covering your valuable collection.

Although risk extends beyond theft (47 percent of art loss is attributed to damage during transit according to The New York Times) art trafficking is a very real thing and according to statistics ranks third behind drugs and arms.

In a case of  theft, the loss is irreversible. Not only the artwork is irreplaceable itself but also even the reputation of the organization suffers from a mere fact that such situation has occurred. Without having a comprehensive fine art collectors insurance from a trustworthy art insurance broker, the masterpieces are subjected to risk.

Apply for coverage here or call me if you have any questions or to discuss your options.

William G. Fleischer CIC | Principal
T: 212 566-1881 ext.111
E: wfleischer@bfbond.com
W: ArtInsuranceNow.com

 

 

David Bowie’s Art Collection to be auctioned, how would a collectors policy respond?

Not just David Bowie’s Estate sends work to the art auctions but individual collectors do also.

The most popular conversations I have are collectors looking to insure their work while in transit to an auction house like Christie’s, Sotheby’s, de Pury, and Phillips house.

Many times the auction house will either visit the collection or ask the collector to send the item to be auctioned directly to the house, either to be further evaluated or to be inserted into the auction rotation.

The preferred Collector’s insurance policy I like to sell, include and is not limited to coverage in transit and away from premises, in exhibitions and in storage and does not exclude auction houses.

The evaluation of the Art is based on two different models. Depending on the Art Insurance Company policy wording, One base is on the schedule amounts of the item on file (either with the Insurance company or the Collector) and the other is based on the current market value (onus of proof is on the collector).

In the case of David Bowie, Jim Hendrix or even Robin Williams, the auction house receives these items on consignment and will charge a hefty fee to insure them while on the premises.  I advise my clients to not use auction house insurance because most of the policies I sell have coverage for unnamed locations or broad enough to cover the works given for sale on a stated amount.

One of the downfalls of using the insurance, the auction houses give you, is how their insurance establishes values of the art at claim time.  Usually, it is not based on the artwork consignment agreement but on the lowest estimated value. The cost to you for using their insurance is usually much more expensive than what you are currently paying. The standard auction house’s most common policies have wording to the effect of;

Property of others consigned to you for auction, at the lowest pre-sale estimate” and “Where no consignment receipt exists but the article appears on your records fully described, such property shall be valued at the lowest anticipated pre-sale estimate or the amount for which you are held legally liable, whichever is less”

This may be lower than your schedule or market value to entice attention for a bidding war.

When in doubt, call me to discuss your unique situation.

William

William G. Fleischer CIC | Principal
T: 212 566-1881 ext.111
E: wfleischer@bfbond.com
W: ArtInsuranceNow.com

 

AXA Art Insurance Company

 
Good News! After 29 years in the Insurance Business, I have partnered up with   AXA and Travelers Insurance Company. We can now negotiate favorable terms and conditions with very competitive pricing. I now have the facility to insure all types and size collections, Dealers, Museums and Non-profit galleries.
If you are involved in the art world, I can insure your exposures.

• Commercial Art • Art and Antique Dealers • Restore and Conservators • Museums • Private collectors • Large or Small inventories. • Domestic or International. • Art Fair transportation, while at fair,     shipped to collectors • Art loaned to Museums or non- profits, • Art being shipped or carried on board, • Coverage for special events, Parties,     Gala’s, Dinners. • Non-profit organizations and more

There are special policies so broad that besides the standard theft or breakage coverage’s it actually includes mold and devaluation of the art pieces due to a loss. The premiums begin around $2,500 for about $250,000 worth of protection.

Recent successes:  An Art dealer who brings works to various fairs and sells from her private gallery just purchased this policy

$300,000 premises limit $300,000 unnamed location $300,000 while in transit We set the unnamed location limit and transit limit as matching limits to avoid any gaps in coverage. Premium is $3100 with $1,000 deductible.

The Genuine Article“Total flexibility with market-leading security – the ultimate high-net-worth coverage for art and antique collectibles, buildings, and contents.”
Call me with your questions.

William G. Fleischer, CIC 212 566-1881 ext 111 wfleischer@bfbond.com

Dealer Insurance, Museum Insurance, Corporate/Private Fine Art, and Collectibles Insurance.

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Consignment Options

I was chatting with a Art Dealer and we were reviewing A proposal for her business. As we went through the quote, she had a question regarding Consignments.
Interesting, as a dealer, the usually business model is to receive work on consignment, but what happens when you consign works to other dealers. How is the coverage applied.

So I pulled out policy forms and started to read through them. This is what I found under Valuation.

Property on consignment, at agreed consignment value plus 10%

So My question to the underwriters, is the valuation used for any consignment agreement whether if the deal is the consignee or the consignor.

In one underwriters opinion, he wrote to me this

Since this is a dealer form, the consignment refers to property on consignment to the Insured as the dealer.  This way the owner of the property is made whole, and the dealer gets 10% for administrative and marketing expenses they have incurred.”

but the underwriter failed to clarify works on consignment to other dealers.

 

Property sold but not delivered and/or while in transit to consignee’s or owner’s premises shall be valued at the selling price plus expenses, if any, which have accrued from the date of sale

So now my question is while in transit to consignee, if not sold, how is it valued, based on what i read, it would be selling price plus expense,. You would think the company would argue the dealer valuation of  cost plus 20% or 30%  or selling price less 20% or 30% depending what negotiated with the from Insurance company).

To further complicate the issue, another company responded a a simple way. A Consignment is a consignment no matter to the dealer or among dealers.

So in conclusion I must use that famous insurance answer to almost all questions of coverage; “maybe, depends”

This is why I love the Insurance business exploring the grey areas in policies.

Visit my main website page here

APPLICATIONS:

Art Dealers
Artist Transit/Exhibition/Studio Insurance New Program
Auctioneers
Conservators/Restorers
Corporate Collections
Personal Collections
Exhibitions
Museum Collections
Business Owners Liability

BERNARD FLEISCHER & SONS, INC.

29 Broadway, Suite 1511, New York, NY 10006-3201
(212) 566-1881 ext 111 or (800) 921-1008

 

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Insurance for Art Galleries

Our customized insurance policies are geared toward your typical Art Galleries, Museums, Exhibition space, and Dealer businesses.  We combine General Liability, Public Liability (Bodily Injury and Property Damage) into one straightforward policy along with non-salable contents, desks, chairs, computers, fixtures, racks and business property. Our policies can include landlords, curators, and artists as additionally insured.

 

Qualify for better pricing if you combine General Liability and Property Insurance into a Business-Owners Policy with Fine Arts Insured under a separate policy to maximize coverage while minimizing price.

 

A Business-Owners Policy includes: 

General Liability insurance coverage of an Art Gallery insurance policy is comparable to a typical commercial general liability policy, providing protection against claims of bodily injury or property damage for which your business may be liable.

General Liability means liability insurance for the cost of defending lawsuits stemming from:

  • Accidents which  cause bodily injury and/or property damage
  • Trip and Fall Incidents on premises.
  • Claims such as libel, slander, and False advertising
  • Errors or negligence from professional service is not covered by a General Liability Insurance policy. Must purchase a separate policy for this.
  • Business property insurance for physical assets, such as contents, improvements to your space including decorations and furnishings non-salable items.
  • Can cover loss of business income and extra expenses resulting from a covered loss.
  • Outdoor Sign
  • Insurance Money and Securities Insurance
  • Employee Dishonesty Insurance
  • Water Back-Up Insurance
  • Off Premises power failure

 

Broader coverage on a stand-alone fine art policy:  fine art while in the gallery, storage or while in transit,

 

The same type of coverages can be found in our Museum, Exhibition, Private Dealer, and Auction House insurance policies.

 

What is the average cost of Art Gallery Insurance? Premiums typically start around $600 but every art gallery has different requirements, property values, and coverage requirements. Prices will vary.

Please call William Fleischer, CIC at 212 566-1881 ext 111 or visit us at www.ArtInsuranceNow.com

 

APPLICATIONS: