Art and Antiques Specialist Risk Management Advice

Because I am always receiving all sorts of art related information I have decided to share some excerpts.

This is from a Zurich informational flyer.  Its a helpful flyer breaking down various aspect’s, like:

Understand how to Assess the risk, climate control for fine arts and Antiques,  placement of rugs and carpets away from fireplaces. The flyer gets into special care for paintings, moving art, security advice and professional valuations and photographs.   it’s worth a quick read.

Click here for an application to insure your Art and antiques.

William G. Fleischer, CIC

President

29 Broadway, Suite 1511

New York NY 10006

212 566-1881 ext. 111

Email: wfleischer@bfbond.com

www.ArtInsuranceNow.com

Informative WSJ Article features William Fleischer of ArtInsuranceNow.com

When you buy a piece of art, can you be sure it’s really yours? Many collectors don’t always feel certain on that score. They worry in some cases that after they make a purchase someone will show up, maybe years later, and claim the art was stolen at some point in the past—ultimately leaving the new owner empty-handed, without the art or the money paid for it.

That’s one reason many art advisers and lawyers recommend title insurance, which can at least partially protect a collector’s financial interests if a piece of art has to be surrendered. But theft isn’t the only issue. Title insurance also can help protect collectors if the person they bought art from becomes entangled in divorce, bankruptcy, probate or other legal proceedings that question the seller’s right to dispose of the art.

 

Some advisers say title insurance is particularly important because of the sharp increase in the prices of many artworks in recent years—buyers have more to lose. But title insurance has been a hard sell.

William Fleischer, president of insurance brokerage firm Bernard Fleischer & Sons Inc., says most collectors are willing to forgo the cost, in part because many already have paid advisers and lawyers to check on the authenticity and history of ownership of their art, and they have confidence in those experts.

For those who want additional reassurance, some insurance companies offer “defense of title” coverage, which typically pays up to $100,000 in legal costs in the event of a title dispute but doesn’t reimburse policyholders for the value of any objects taken away from them.

The leading provider of more-complete coverage is New York-based ARIS Title Insurance Corp., a unit of Argo Group International Holdings Ltd. It offers policies that cover legal costs in the event of a title dispute and the full purchase price of the piece if the buyer has to surrender the work. Collectors pay a one-time premium averaging 2% to 3% of the purchase price of the item being insured. They can increase coverage, for an additional premium, if the artwork’s value appreciates.

Mr. Grant is a writer living in Amherst, Mass. He can be reached at reports@wsj.com.

Original Article link below.

http://www.wsj.com/articles/art-collectors-weigh-title-insurance-1428894124

 

Response to Chubb white paper report

As a broker who sells Art insurance, www.artinsurancenow.com, Antiques and Collectible Insurance nationwide, I can attest to the increase in awareness of Values across collections.  May it be Fine Art, Photography, Antiques, Rare books, memorabilia, and all that we collect, is influenced by various media outlets.

 

There are many ways to position an Art Insurance Policy where it can keep your valuables, relatively current with the market price.
Appraisals cost money, there are endorsements which can be added to policies to increase the value by 150%. Just remember the company will not pay you more than the policy limits or class limits.

 

Each Carrier, AXA, Chubb, Travelers or Markel, have products which either complement your Homeowner’s policy or have a standalone Policy.
If you are interested in exploring the option you can call me:
William Fleischer, CIC
Bernard Fleischer & Sons, Inc.
29 Broadway
New York, NY 10006
212 566-1881 ext 111
www.Artinsurancenow.com

Is Art insured in the belly of a Plane

Yes, items can be checked into luggage and still be covered, but this is not the best way to ensure coverage under this policy because you will be violating the packing warranty. 

The packing warranty is broad enough that it allows the Insured to pack the items, but still must be packed “utilizing procedures and materials to protect the Covered Property.” 

What does this mean?  It means you can pack a wood carved 12” dish into your luggage, but you cannot insure a Tiffany lamp wrapped in a sweatshirt.

If the item is of art or cultural importance, the country of origin may seize the property.  This policy does not cover any Governmental Action.

Fill out a collectors application for a quote today.

 

Interesting Art related Articles links

Art Forgers Beware: DNA Could Thwart Fakes

http://www.nytimes.com/2015/10/13/arts/design/developing-dna-as-a-standard-for-authenticating-art.html?_r=0

Looming spectre of theft at art galleries

http://citizen.co.za/384098/looming-spectre-of-theft-at-art-galleries/

Here’s how much it costs to package, ship, and insure a multi-million dollar piece of art

http://www.businessinsider.com.au/5-things-to-do-before-you-buy-an-expensive-piece-of-art-2015-5

Provenance Premium

http://appraiserworkshops.blogspot.com/2015/04/porvenance-premium.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+AppraiserWorkshops+%28Appraiser+Workshops%29

Creator or Buyer: Who Really Owns the Art

http://artlawjournal.com/visual-art-ownership/?utm_source=wysija&utm_medium=email&utm_campaign=April+20+2015

 The Smarter Way to Invest in Art

http://www.bloomberg.com/news/articles/2015-03-19/art-investing-smart-buys-are-overlooked-underappreciated-works

Writing off the Warhol Next Door (Art Collectors Gain Tax Benefits From Private Museums)

http://www.nytimes.com/2015/01/11/business/art-collectors-gain-tax-benefits-from-private-museums.html?emc=eta1

No Artist Resale Rights for US, for Now

http://news.artnet.com/market/no-artist-resale-rights-for-us-for-now-220318

All Together Now: Artists and Crowdsourcing

http://www.artnews.com/2014/09/02/artists-and-crowdsourcing/

Ian Berry: Teaching Students How To See

http://www.artnews.com/2014/01/20/ian-berry-teaches-students-how-to-see/

Sotheby’s and Jancou Battle in Appeals Court over Cady Noland Artwork

http://www.artinamericamagazine.com/news-features/news/sothebys-and-jancou-battle-in-appeals-court-over-cady-noland-artwork/

The Visual Artists Rights Act of 1990

http://digitalcommons.law.ggu.edu/cgi/viewcontent.cgi?article=1540&context=ggulrev&sei-redir=1&referer=http%3A%2F%2Fwww.bing.com%2Fsearch%3Fq%3DVisual%2BArtists%2BRights%2BAct%2Bof%2B1990%26form%3DIE11TR%26src%3DIE11TR%26pc%3DCMDTDFJS#search=%22Visual%20Artists%20Rights%20Act%201990%22

Artist work covered while in the process of making it?

“Damage sustained during any process or while actually being worked upon and resulting therefrom unless caused by fire or explosion.”

As an artist policy, the policy will cover completed works and works that are still in progress. Artists can be working on several projects at once and may complete them at varying times or never finish them at all.

The inspiration may be lacking to finish a project, but we do not want to cover things that do not seem to fit, work, or just do not seem right. So, we do not cover while it is being worked upon whether that process is painting, modeling, carving, cutting or whatever process they use to create the art.

 

Call 212 566-1881 ask for William or visit www.artinsurancenow.com

How to evaluate your own work as an artist

Since my Launch of an Artist’s Insurance website: I have had numerous conversations regarding “How an Insurance Company evaluates Art.”

The policy evaluation is straightforward. Sales price minus 30%.

This is a simple formula if you have a track record of sales.  Where the conversation turns, is when the artist is new to the market.  I say this because I have worked with artists who, at various ages and experience are now, entering group shows and exhibitions.

A seasoned artist knows the consignment agreement or the exhibition agreement requires the artist to place a value of their Artwork in the form, but for the neophyte, this is where the “tire hits the Road” or the “paint hits the canvas” and takes the discussion deeper.

So what are the methods of pricing one’s own work, and will the insurance company accept the sale price of an artist, who never sold?

This is how I approach the question.

First, everything has a value.  Fundamentally;  material, time, education, experience, teachers, demographics, size shape, media, subject, along with time spent, researching and actually producing the work. etc…

Of course, the Artist understands this, but what is the valuation sale price, I tell them to just make up a reasonable sale price using the fundamentals as your guiding denominator. Usually, they are within range and the Insurance does not dispute and pay the claim.

In the policy form, it is up to the Artist to prove what the value of sales, so if they put an unrealistic sale price on the work, the insurance company using similar methods will determine the sale price is way over inflated.  At this juncture, an independent third party will then appraise the work and the valuation will be established, and the claim would be paid out accordingly.

Bottom line, price your work based on the merits of your talent and experience with keeping the ego in check.

New Artist Insurance Program custom designed for the serious Artist.

 

Limits start at $100,000

 

  • Exhibition
  • Transit,
  • Studio
  • Storage
  • Worldwide Coverage
  • Includes Material and commissioned work in progress
  • Visit artinsurancenow.com for all your Art insurance

 

Premiums start at $1000

 

Kindly help me get the word out by passing this along

 

Thank You

 

William

William G. Fleischer, CIC
President
29 Broadway, Suite 1511
New York NY 10006
T. 212 566-1881 ext 111
F. 212 566-1615
C. 917 863-8787
wfleischer@bfbond.com
www.BFbond.com
www.ArtInsuranceNow.com

How is your Art being Insured?

Every day, I am helping to insure art collections.  art collections, Gun Collections, Rug Collections, Rare Books Collection, Prehistoric Art collections, Samurai Swords, Bibles,

In the past few days, I have insured rare books, Bibles, Photographs, Manuscripts Antique guns, and furniture. click here for applications

Your homeowner’s policy excludes perils like Roof leaking, wind-driven rain, back up of sewers and drains, Breakage, transit Loss of Value due to a loss.

Most fine art policies have these coverages included. If there is something which is valuable to you and your family, I can insure it.

Call Me 800-921-1008

William G. Fleischer, CIC
President
29 Broadway, Suite 1511
New York NY 10006
T. 212 566-1881 ext 111
F. 212 566-1615
wfleischer@bfbond.com
www.ArtInsuranceNow.com

Exhibition Policy or not?

Email regarding having Artist shows in an Office Environment.

I am an attorney, however, I put an art gallery in my law firm space. The agreement I have with the artists is that they allow me to hang their work for 3 to 4 weeks. I promote their work to my clients and throw a party in the artist’s honor, where the artists agree to be present and talk about art.

We serve some refreshments and invite everyone we see. There is no charge to the artist. I do not pay the artists. I do not sell art. There is no charge to the people who attend. It is a community event intended to bring a little culture to our small town and, admittedly, let people know where my office is without in-your-face law office marketing.

The rules in Iowa are the strictest in the country about regulating attorney advertising. I cannot hand someone a business card and say, “hi. I’m a lawyer. What can I do for you?” But, I can hand someone a party invitation flyer and say, “Hi, please come to my law firm’s gallery party and meet some cool artists, see some great art, listen to some inspiring music, and have a little wine and yummy appetizers. It’s so much fun!” I know. Crazy stupid.

When the party is over, the artists take their work away and three or four new artists bring in work to hang, and we do it all over again. My 4th party is November 14, 2014.

The artists for this party are asking if I have insurance to cover the art in the case of fire, vandalism, or theft. My insurance guy is not helpful. He says I have no insurable interest, so I cannot insure them with the exception that if I trip over them, my liability insurance might cover it. Lame.

The artist could sue me if something were to happen to their paintings while in my control. I do have an insurable interest, at least while they are in my custody and control.

Can you assist me in finding a way to obtain insurance or a bond of some type that will protect me in the case that something unthinkable would happen to these paintings?

Thank you,
Warmest regards,

The Answer… or my Answer.

When I further inquired I found the Artist work was hung without any paperwork. Interesting.

1. If the work was Loan during the show to the office, it may be covered under the office BOP policy, usually, there is $25,000 limit for Fine Art.

2. A dealer art insurance policy could be bought, for $150,000 on location limit, $30,000 Art Transit and $30,000 at unnamed locations.

3. Have the Artist buy their own Artist Insurance policy. $100,000 of Art Insurance while in transit, in the studio and while at Exhibitions for an annual price of $1,000.00.

4. Explain to the Artist,  it’s a business risk and art is a risky business.  The odds are higher of damaged or stolen while in transit, and less than their work in the studio, at lease your office is alarmed or locked 🙂

She explained to me even though a hold harmless could be drawn up and signed, there was still the exposure of a negligence lawsuit by the artist. So here is the question to ponder, buy insurance and not worry or understand it is a business risk you are taking verse the benefit of letting the people know your law office exists.

 

 

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