Artist Insurance

The Huffington Post recently ran an interesting article on insurance coverage for artists. This goes beyond the typical policy for studio and fair liability and covers completed works insurance in the event of loss, theft or damage.  Not something we typically deal with as appraisers, but I still found the post interesting and just some additional knowledge to file away.

The Huffington Post reports

In the "Selected Collections" of his resume, Irvine, California artist Jeffrey Frisch lists a variety of private buyers of his work and one "Anonymous Thief," referring to the person who stole one of his sculptures from an exhibition. That's putting a good face on the fact that the $500 artwork was uninsured, so all that remains for him is a laugh.

Purchasing insurance for one's own artwork tends to be an investment few artists make. It is not at all unusual that an artist will take out a business owners' or a general liability policy for their studios and fair booths, which cover injuries to visitors, damage to equipment and materials, and losses when pieces are harmed while in transit or on display at a gallery or fair. Those policies offer a minimum of $1 million in coverage and start at $300-400 per year, with a $250 deductible. (Premiums are also based on the state -- California and New York are the most expensive, because of large awards resulting from lawsuits, along with hurricane-prone Florida -- and the existence of fire and burglar alarms, as well as the age and type of building (wood-frame or concrete block), the proximity to a fire or police station and the type of door locks in use.)

Insurance coverage of the completed artwork, however, usually requires a separate fine arts rider, just as some art collectors include on their homeowner's policies, which are considerably more expensive. For artists, a fine arts policy would include artwork in their home, studio and in temporary locations (such as exhibitions or loans or on approval to a customer or at a frame shop), as well as while being shipped from one place to another. "Claims usually happen in transit," said Armanda Bassi, an insurance writer for the Washington, D.C.-based Flather & Perkins, which writes policies for artists and craftspeople. In many cases, the artists seek payment for a total loss rather than the cost of restoration, because "they don't want to show or sell work that is damaged." Flather & Perkins charges $1,250 per year for a fine arts policy that provides $50,000 in coverage, while Thompson & Pratt in Lancaster, California offers a $1,500 plan that includes $100,000 in coverage. BRI/Partners USA, an insurance carrier recommended to members of the American Craft Council, offers a property and liability package for artists and artisans, with premiums based on the insured's own stated values of artwork.

All-risk fine arts riders that are part of a homeowner's policy by law include terrorism coverage, but those who live in likely areas of potential acts of terrorism, such as Chicago, Las Vegas, Los Angeles, New York City and Washington, D.C., may pay more for their policies than those residing elsewhere. For artists who have incorporated and whose artwork is owned by the corporation, they may find that insurance carriers no longer automatically provide coverage for damage resulting from a terrorist act to their commercial customers, a repercussion from the 2001 attack on the World Trade Center. However, because of the federal Terrorism Risk Insurance Act, insurers are required to provide separate terrorism coverage for commercial customers, costing an additional two-and-a-half to seven-and-a-half percent of the annual premium. The vast majority of art galleries in high target areas have added these policies.

However, even modestly priced policies may strike many artists as unnecessary, since the problem of theft or horrific damage seems remote, and most will be proven right. There is, of course, the exception. "I hadn't any insurance on my art, because I couldn't afford it," said Joel Fisher, a sculptor in North Troy, Vermont who had 43 bronze statues stolen from his yard and house last November. "It's a lifetime of work for me," adding that he estimates the total value of the artwork at more than $1 million.

Art or cultural property theft, thought to be the third largest dollar-wise area of criminal trafficking in the world after drugs and illegal arms sales, typically affects private collectors, as well as museums and houses of worship. Police investigators of art thefts describe the robbers' intentions as one of three possibilities, the desire for a quick sale, insurance ransom or as card in negotiating downward the charges for a different crime. Stealing from the artists themselves occurs perhaps more often but at a lower price point at shows, in which a number of visitors may be crowded into a small booth at one time. Bruce Gray, a sculptor in Los Angeles who had a $3,000 tabletop piece stolen off a Hollywood set when he had rented the work for a movie production, speculated that the thief "just wanted it. The person wasn't looking to resell." That point of view, seeing thefts from artists as a form of shoplifting, accords with a number of sponsors of arts and crafts shows as well.

For Joel Fisher, however, the purpose of the theft of his sculptures was none of those. "It wasn't the art, it was the metal," he said, noting that the cost of bronze has tripled since many of the artworks were first made. State police found 11 of the 43 stolen sculptures in a truck en route to an out-of-state smelter.

Source: Huffington Post