Damage to Art happens more often than is reported. How can you make sure you are covered?
American Airlines, along with seven other art handling companies, is being sued for damage to a slash sculpture by Lucio Fontana. the damage work occurred while it was being shipped to the New York Armory Show. Lloyd’s of London was the insurer for the gallery, Marc Selwyn Fine Art.
Most art claims arise from transit damages, this is so important to make sure your current Art Insurance policy covers losses while your fine art, antiques, and collectibles are being shipped. Most policies do not restrict the mode of transportation be it Air, Train, Boat or Truck, but they do restrict using the United Postal Service’s regular mail.
The Swiss art trading company AGB Contemporary AG consigned Concetto Spaziale (1955-60) to Marc Selwyn with a sale price of €175,000 ($196,000), according to the ArtNews newspaper. When the work was actually damaged is difficult to figure out.
The Art was packed and stored by World Freight outside of Paris, then trucked to Charles de Gaulle airport for JFK via American Airlines flight to New York. One week later, the sculpture was transported to the Armory Show where it was uncreated and the damage discovered.
Now, this is where I find it interesting. Lloyd’s paid Marc Selwyn Fine Art $104,250 to cover the insurance money due. But the work was for sale for $196,000 why did Lloyds of London pay out less? My theory has a few variables.
The Art Dealer, Marc Selwyn Fine Art policy had a valuation clause of % of sale price or a % of consignment agreement minus a deductible. Sidebar comment: checks are made to the dealer, not the lender, which could be a problem if the dealer holds back or refuses to pay the lender, it is recommended you ask to be a loss payee on all valuable work given to dealers/galleries.
These 3 variables are important to ask if you are the collector trusting your art, to a dealer.
- What is your policy evaluation clause if the work is stolen or damaged? Typical dealer valuation is selling price minus 20% or 30%.
- What is the valuation based on Consignment? usually consigned amount plus 10%. But what if work was double consigned? most policies are silent on this and would have to be clarified by the company or the courts.
- What is the deductible on the policy, $1,000, $10,000, $100,000?
- Are there any restrictions on the method of travel? to countries?
- I highly recommend the lender to be named as a loss payee on the dealer policy, in the event anything should happen to the consigned work.
Each situation is different. Circumstances and risk tolerances evolving around the” business of Art” should be explored to help mitigate losses due to the unforeseen perils in the world we live in.
William Fleischer, CIC
800-921-1008 ext 111
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