Artist Studio Insurance “The Pitfalls”

Artist’s who work out of their home may think they have coverage with their Homeowner insurance company, but do they?

I get it, most artists have lofts, special rooms or detached structures where they create, show and sell their art.

The Limitation and Exclusion: Business personal property on premises.

Here is the simple 2 question test if the exclusion applies. If you answer yes, an Artist Insurance policy is recommended

  • Continuity of activity
  • Monetary gain (profit motive)

Homeowners Insurance Policies for Owners or Tenants are designed to protect you and your personal property.  These policies contain liability for trip and fall, house parties, lawsuits against you and members of the household for bodily injury or property damage to someone or their stuff.

 

The exclusions/limitations for a business in your home are very limited unless you take some measures to add back coverages.

The Homeowner Insurance Policies are very strict and are looking to avoid anything to do with a business in the home, unless they know about it and add special endorsements.

First, I would like to point out that any art, materials, books or paperwork stored in a detached structure, voids coverage for that structure unless it is added by endorsement to the policy.  If the “Art stuff” is in the home than it will not void the insurance coverage, but the limit for business property is usually $2,500.00 and work you created is not valued at retail price, but just materials.

Secondly, Liability is not covered by the Homeowner’s policy for anything to do with the business, if someone got hurt during a studio visit, the claim would be denied.

To somewhat fix this, add “other structures on the residence’s premises”, if the value exceeds the basic coverage on the current policy.  To protect you from trip and fall claims, add, “Permitted Incidental Occupancies”. Note the situation where you have more than $2,500 of personal property, you should be looking for an Artist carve out policy, like an Artist Studio Policy.

When it comes to the Liability, the homeowners have a few endorsements you could use, “Permitted Incidental Occupancies”, usually costing  $27.00 for $500,000 worth of coverage, but they have limitations, such as premises only, no additional insured’s and no products or completed operation coverage. It’s best to look for a carve-out policy for this too.  I recommend buying a separate Business owner’s policy for just simple fixtures since all the others should be insured in my program.

In conclusion:

Artist’s who create at home are better to have an Artist policy which evaluates the work using retail value, not materials cost.  An artist policy which includes, All works for sale, materials, tools, reference library, transportation, while in storage, at Exhibitions and worldwide; All the coverages loaded into my Artist Policy Program.

For more information visit us at www.artinsurancenow.com to fill out a quick EZ application for a fast, free quote.

To discuss your particular situation contact me,

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

 

What is a condition report?

Report what you see. The most important quality of a condition report – and what allows it to function at all – is clarity.

Photography, drawings, and verbal description should be employed effectively to document any exceptions that you find. Identify the exception, locate it on the artwork and indicate its scope.

Strive for short and precise notes, and limit your use of relative terms; such as bad, small, severe, etc.

Liberty Mutual’s Personal Property Endorsement not Broad Enough Coverage

I recently was working with an account who thought Liberty Mutual Arts policy was a great deal until he spoke with me.

The policies I like to offer are geared to the Collector’s requirements. I will outline a few downfalls of the Liberty Mutual Inland marine endorsement.

1. Your Art Glass, Glassware, Statuary, Marble, Bric-a-Brac, Porcelain, and similar fragile articles, unless they give a very restrictive exception.

2. Everything has to be scheduled, ours we place

When your Art Collection is more Valuabe than your Home

I just received a referral from Liberty Mutual. The homeowner has insurance for his home of $350,000 but his collection is worth $400,000. Liberty Mutual would not insure the art so they sent him to me. I also get similar referrals from USAA and Geico.

His story is very typical, He is receiving an inheritance of valuable art. His short play is to bring the art into his home, then possibly sell them in the future.

I explained to him the various options, Blanket Coverage, where he will have to prove the value at the time of loss, this is easy because when people die, there is an accounting of assets required from the IRS to establish death tax.

But there are cases where the tax valuation does not exist or purposely low. For establishing current market value under a blanket policy, tax evaluation is not important but the description can be. The description can be used to help a dealer or appraiser establish the current market price.

Then I explained to him, he can insure based on his schedule, The schedule does not have to be backed up with bills of sale or appraisals. The downside to this, he may undervalue the art.

The third way we discuss is a schedule based on Bills or appraisals, This is great for at the moment value, but can lose if the art appreciates.

I also explained the coverage I can suggest to him, would include Coverage for Art Transport, Storage while the Art is in his home and if he decides to either put the art in an exhibition or give to a dealer, the insurance would follow these actions.

The process is quick, just complete the collector’s application on my website www.artinsurancenow.com

Call me when you have a situation like this, I can design the right policy for you.

What to ask Art Gallery/Dealer before consigning your Art

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.

  1. What is your policy evaluation clause if the work is stolen or damaged? Typical dealer valuation is selling price minus 20% or 30%.
  2. 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.
  3. What is the deductible on the policy, $1,000, $10,000, $100,000?
  4. Are there any restrictions on the method of travel? to countries?
  5. 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

www.ArtInsuranceNow.com

 

Employee damages Art, is it Covered?

In December 2015, a security guard damage, defacing and destroying paintings and sculptures of artwork, in the Wexner Center for the arts, Ohio State University, before killing himself. Does AXA Museum policy cover such losses? Yes.

The AXA Museum form does not exclude for damage by an employee or the public.

AXA Museum policy covers Art owned by the Museum, property on loan or offered for sale to the Museum. The coverage extends to frames, crates, cases and packing material.

The main focus will be the loss settlement. After, restorers and appraisers evaluate the work to determine the Current Market Value of any work determined:

 A Total Losses, the company we will pay “current market value” of the property at the time “loss” or damage occurs. The “loss” or damage shall be ascertained or estimated according to such current market.

For the Partial Losses, The company will pay the Museum an amount mutually agreed upon based on the following:

(a) The cost to repair the property to its value immediately before the “loss”; or
(b) The difference between the value of the property before and after the “loss”; or
(c) The cost to restore the property as nearly as possible to its condition immediately before the “loss”. If the restored value is less than the value immediately before the “loss”, we will pay the difference between the restored value and the value immediately before the “loss”.
Having the right policy in place with the right coverages helped Ohio State University with the money to rebuild and or restore their amazing collections.

Insurance is to indemnify and restore the Insured to the situation prior to a loss. Sadly, Art is one of those objects which are very difficult to return to its original grandeur.   Nothing last forever, but one would hope, through proper insuring a collection, it could be rebuilt with similar works or genres.

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

 

 

 

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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Newly Designed Artist Insurance Policy Protecting your Art.

Our new 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.  No more worrying about, Theft, Fire, Water Damage or Vandalism. These coverages and more are covered in our Artist Insurance Policies.

Worldwide coverage: Whether you show in Venice, Hong Kong, Paris or any of the Art Basel locations! Everywhere the USA has a trade agreement. Our policy will cover your Art in Transit, Storage and while at galleries and exhibitions.

Highlights of coverages:

  • Artwork in the studio, up to $300,000.
  • Art is covered While in Transit, At Exhibitions, In Storage and Worldwide.
  • A XIV Rated Insurance Company (by A.M. Best).
  • No Membership, No fees, No Maximum per item, and No Appraisals or Schedules.
  • Very low $1,000 deductible.
  • Best loss settlement valuation. Selling price less 30%. Includes Works in Progress.
  • Supplies, Canvas, Materials, Paints, Frames, Tools and Reference libraries are also Included.
  • Replacement Cost of Studio Tools and Equipment.

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.

 

Insuring Art Work at Market Value

Collecting Art is fun, but maintaining values fluctuate a lot on an insurance policy.  All homeowners policies where fine art is a part of the policy are written on a scheduled basis.

To add these artworks to your schedule, the company requires a current bill of sale or a current appraisal.  The value is locked based on the schedule, good if the value goes down, bad if the values goes up.

Here is an endorsement which I feel the collector should consider when they are insuring an art collection.

It’s the Current Market Value 150.  With this endorsement, the company will pay the amount shown on the Schedule for which the item is insured. However, if the market value of the itemized article immediately before the loss or damage exceeds the amount of itemized coverage for that article, we will pay its “current market value” immediately before the loss or damage up to 150% of the amount of the itemized coverage for that article. Of course, if the item market value decrease you will get less.

For a quote on Fine Art, Collectibles and objects of value click here for the collectors application on my website.

 

 

Insuring art work in transit to auction houses

Recently with all the Auction houses in full mode, I have been receiving many phone calls concerning artwork in transit.

The main movement of Art and Collectibles are going to the Auction houses. Most of the time, Individual’s would send the auction house information about the work, and if acceptable, the burden of insurance falls on the collector to get the work to the Auction house.

Most collectors who sell through auction houses, don’t think about coverage while it is at the Auction house.  Many Auction houses charge very high rates for this coverage , which in many circumstances are included in my design of the policy.

Granted, you can buy a one-way art or collectibles transit policy that stops once the work is received, or you can think beyond and purchase a policy which at times include insurance coverage while shipping to Auction Houses, Galleries, Storage, and framers.

Complete my form for collectors, and let’s figure out an Art Insurance program which fits your style.

William G. Fleischer, CIC

www.ArtInsuranceNow.com

Insuring Art, Art Gallery, Art Dealer, Artist and the Art world needs