Category Archives: Artist 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

Caution! Art Claims are Taxable, Read on.

Losing treasured items is traumatic enough, imagine being taxed for replacing them.

In an insightful article by leading tax professional Julian Block, the perils of being taxed on an Insurance claim for art that has appreciated are explained.

Using the received replacement value to purchase works of other types may not qualify you for the IRS’ “complete non-recognition of gain under the involuntary conversion rules”. This means you can be taxed.

Read the incisive article below and visit ArtInsuranceNow.com for comprehensive Fine Art coverages.

*The law authorizes an important tax break for a property owner who collects insurance (or other compensation) for property lost due to fire, theft or condemnation by a governmental authority. Ordinarily, you’re liable for an immediate tax on any excess over the cost basis of your property.

But a special rule permits taxes to be deferred if the proceeds are reinvested in similar property within the deadlines imposed by the IRS for replacement. For the “involuntary conversion” rules to apply, Code Section 1033 mandates that the replacement property has to be “similar or related in service or use” to the property replaced.

Understandably, words like “similar” lend themselves to different interpretations. Also understandable is that the IRS sometimes takes a hard-nosed approach.

Consider, for example, Letter Ruling 8127089. It held that oil paintings aren’t “similar” to lithographs so as to be eligible for involuntary conversion deferral.

The ruling dealt with a request for advice from someone I’ll call Irene Holmes. A fire in her home destroyed an art collection that included about 3,000 lithographs and a small number (about 1 percent of the entire collection) of oil paintings, pencil drawings, and wood carvings. A prudent Irene had insured the collection for its full current value. As current value exceeds her cost basis, a portion of the insurance proceeds represents gain.

Irene explained that she intends to use the proceeds from the insurance to purchase the replacement property. The replacements will consist of a mix of media — approximately 63 percent lithographs and 37 percent art works in other artistic media, such as oil paintings, watercolors, sculptures or other graphic forms of art — rather than reflect the composition of the lost artwork.

With that set of facts, the IRS “will not consider as property similar or related in service or use, art work in one medium, destroyed in whole or in part, replaced with art work in another medium. Therefore, in order to qualify for complete non-recognition of gain under the involuntary conversion rules,” the IRS spelled out what Irene has to do.

She “must purchase the same percentage of lithographs as were destroyed in whole or in part and the same percentage of art works in other artistic media as were destroyed in whole or in part.”

What happens if Irene decides to reinvest as proposed (63 percent in lithographs and 37 percent in other media? She’s going to be liable for taxes on the 37 percent of the proceeds that she reinvests in “other artistic media.”

Additional articles. A reminder for accountants who would welcome advice on how to alert clients to tactics that trim taxes for this year and even give a head start for next year: Delve into the archive of my articles (more than 225 and counting).

*Reprinted with permission from a Feb 20th, 2018 article by Julian Block.

About Julian Block

Attorney and author Julian Block is frequently quoted in the New York Times, Wall Street Journal, and the Washington Post. He has been cited as “a leading tax professional” (New York Times), an “accomplished writer on taxes” (Wall Street Journal), and “an authority on tax planning” (Financial Planning magazine). More information about his books can be found at julianblocktaxexpert.com.

Risk exposures such as natural disasters and unexpected events like fire, flood, earthquakes, and storms, can cause extreme damage. Protect your art investments by obtaining an art insurance policy by Art Insurance Now / Bernard Fleischer & Sons Inc.

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Visit www.ArtInsuranceNow.com to learn more, apply here or feel free to contact William Fleischer, CIC at 1.800.921.1008

Fire & Water, Devastates Artist’s Studio.

Commissioned Princeton University Artist’s studio destroyed by firemen’s overspray. Did her Artist studio policy cover her? No! and this is why.

She never bought one. If she did, all of her artwork in racks, stands, files, and on walls, is covered.  Her materials and tools are covered.  Even the reference library is covered.

I feel for artists that see financial hardship when there is a loss similar to this.

For $1,000 per year, your art is covered up to $100,000, not just in the studio but also in transit, at exhibitions and in storage, everywhere worldwide.

Follow our link at the bottom of this article and purchase an Artist studio policy today.

Art studios give artists the space they need to create as well as a way to store their completed works of art and sell art from the studio. Due to the nature of the work in an art studio, art studio insurance is essential. Risk exposures such as natural disasters and unexpected events like fire, flood, earthquakes, and storms, can cause extreme damage to the building and contents. Protect these risks by obtaining an artist insurance policy offered by Art Insurance Now / Bernard Fleischer & Sons Inc.

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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.

Murals – can they be Insured for Vandalism?

I must receive at least 20 calls a year asking if they can insure a mural painted on walls, inside, outside, on buildings, fences, and anywhere else you can think of. Street-level placement Murals will invite graffiti vandals to leave their mark. As a contracted job to produce the Mural, there is an insurable value from the start to the finish of the work.

Since usually these art installations are designed and planned in advance with the cooperation of the building owner, coverage can be found to cover the installation process; a claim is paid based on the percentage of completion.

There is a possibility Insurance may be obtained when the Mural is completed. This will depend on exactly where it has been placed and the safeguards. Regardless almost all insurers would exclude coverage for:

  • Vandalism and Mysterious Mischief
  • Wear and tear, any quality in the product which causes it to damage or destroy itself, gradual deterioration
  • Insects, vermin, or rodents
  • Changes in or extremes of dampness or dryness of atmosphere or temperature

But theft?…

I develop programs exclusively for the Art World, covering, Museums, Collectors, Curators, Gallerists, Artists, and related Art businesses. My policies include Art owned or loaned, in Storage, in Transit, at Auction Houses or Dealers.

I can help with all Art related insurance requirements. Visit us at ArtInsuranceNow.com to apply or Contact me at 800.921.1008 to discuss your unique situation.

William G. Fleischer CIC

Glass Artist Loses ‘Every Single Piece’ in Napa Valley wildfire; Our Exclusive Artist’s Insurance Policy Pays Off.

Napa Valley is typically a peaceful, relaxing place but not for Glass artist Clifford Rainey who lost his home, his studio and most of his work in the Atlas wildfire. The wildfires Fueled by powerful winds have scorched more than 200,000 acres including the beautiful homes of artists and collectors.

 

On Friday morning, Oct. 13, as Rainey surveyed the damage for the first time after his Mount George home and studio burned, said “Every single piece of artwork I own I’ve had since college was lost”.

 

Rainey’s life’s work is far from all lost. His work has exhibited extensively, featured in numerous public collections, including the Victoria and Albert Museum in London, the Corning Museum of Glass in Corning, New York, the M. H. de Young Memorial Museum in San Francisco, and the Los Angeles County Museum of Art, as well as in the permanent collections of the Museum of Arts & Design, New York, Museum of Fine Arts, Boston, the Irish Museum of Modern Art, Dublin, and the Montreal Museum of Fine Arts.

 

The emotional value cannot be replaced but having an artist’s policy to cover financial losses prevents having to start from zero. Our Artist Insurance Policy is designed for the active Artist. Your Art is covered while in the Studio, in Transit, while at Exhibitions and when in storage along with Your Materials, tools and reference library.  No more worrying about, Theft, Fire, Water Damage or Vandalism. These coverages and more are covered in our Artist Insurance Policies.

 

For more information or to discuss your particular situation contact me, William G. Fleischer CIC | Principal.  T: 212 566-1881 ext.111 or visit us at www.artinsurancenow.com to fill out a quick EZ application for a fast, free quote.

Tate to Exhibit Ultimate David Hockney Retrospective

We at ArtInsuranceNow.com are excited that Tate Britain is staging the most extensive retrospective of David Hockney’s work to date in February 2017. As his 80th birthday approaches, over six decades of Hockney’s work will be shown at the U.K. institution including painting and drawing, as well as prints, photography and videos.
From his first one-man show when he was 26 in 1963 he most recently exhibited at the National Gallery of Victoria, Melbourne Australia (DAVID HOCKNEY: CURRENT). He is credited as being one of the most influential living artists.
Tate Britain’s director Alex Farquharson has said: “David Hockney is without doubt one of Britain’s greatest living artists. His impact on post-war art, and culture more generally, is inestimable, and this is a fantastic opportunity to see the full trajectory of his career to date.”
Hockney is also quite the armchair philosopher and a search of the internet will find many quips and quotes, A book on art conservation which cites an AXA Art Insurance funded research laboratory quotes him as saying “Love will decide what is kept, and science will decide how it is kept”.
AXA Art Insurance is one of our many affiliate partners in bringing you the most comprehensive Art Insurance coverages available; to learn more visit us at www.ArtInsuranceNow.com, fill out an application to receive a fast free quote or call 1.800.921.1008 to protect your art and collectibles. Don’t miss David Hockney, on show at Tate Britain from February 9 until Monday May 29 2017 followed by showings in Paris and New York City.

Travelers Insurance, AXA Art, Markel ART, Chubb Ar,t XL Art, Philadelphia Art, Great American Art, Ironsure Art, USAA Art

 

Artist’s Nightmare at the Museum

Museum in the dark pictureJust imagine, you are an artist without an Artist Insurance Policy and you finally get an exciting call from a museum to tell you that they have chosen your work for an exhibition for several months.  You work extremely hard on creating the exhibit and receive a contract from the museum that says they will insure your artwork while it is on display. A friend from out of town visits and you take them to see the exhibit and notice your prized sculpture in the exhibit is damaged. Immediately, you contact the museum and call for a plan of action; you ask to see the security footage and request more information about submitting the insurance claim. The museum seems uncooperative, explains to you the security cameras aren’t operating, there isn’t any evidence to support your claim the sculpture was damaged while on display and there is no insurance information they can provide for you at this time. You continue to push for an insurance claim, the museum continues to be evasive and you feel like you are getting nowhere. It looks as though the museum is not going to submit a claim on your behalf and the repairs will cost an enormous amount of money and numerous hours of your time.

This is a real-life insurance horror story from cases that the Philadelphia Volunteer Lawyers for the arts (PVLA) have heard over the years. Unsurprisingly, insurance disputes are a common occurrence with PVLA arts clients. The underinsurance of artwork presents artists with various problems which are much more commonly associated with their profession than others. Another unique problem with the underinsurance of artwork is with its valuation. Artwork is often not treated with the same financial diligence as other assets because it can be difficult to place a value on it and can cover a broad range of items including paintings, sculpture, architecture, printmaking, digital graphics, ceramics, collage, photography, statuary, textiles, art glass and other decorative items.

Insuring fine art presents challenges that are not encountered with other types of real property; an experienced art insurance broker like Bernard Fleischer & Sons (ArtInsuranceNow.com) can address these problems and provide an art insurance policy with coverage fitting the particular situation. Our artist insurance policy values your art at market value less a percentage. The policy covers your art anywhere in the world, while at exhibitions, galleries, storage and in the studio including transit, materials and tools. Art insurance buyers require the services of knowledgeable insurance professionals because “It’s a different type of insurance”. With most insurance you are just buying a financial promise, any insurer knows how to fix a roof or rebuild a building but with art insurance you are buying knowledge as well. Bernard Fleischer & Sons (ArtInsuranceNow.com) are leaders in appropriately insuring artists, art dealers, collectors, conservators, galleries and museums. For more information visit our website, call 1.800.921.1008 or fill out an application here.

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