60 Percent of Art Damage Claims Arise from Transport

According to the 2019 Art Basel and UBS Global Art Market Report, more artwork is fetching higher sale prices worldwide. Art sales at auctions, art fairs and online reached $67.4 billion in 2018, up 6 percent from the previous year. With the network of dealers and collectors spread across the globe, more art winds up in transit—where matters can become complicated.

Late last month “La Jeunesse de Bacchus,” a 20-by-11-foot mythological scene painted in 1884 by William-Adolphe Bouguereau was moved from Bouguereau’s Paris studio, where it had hung for 135 years, to Sotheby’s New York City auction house. The preparation for transport alone required 20 people, a crane, a truck, and two and a half days of packing. This massive undertaking began in January; the painting was available to view in March and will be offered for auction later this month.

The resources and planning required to safely transport art are as well known to insurers as the potential damages inherent in the process, noted Bill Gatewood, Corporate Vice President, National Practice Leader, Personal Insurance, Burns & Wilcox, Farmington Hills, Michigan. “The biggest threat to fine art is breakage,” he said, “and a lot of it comes from mishandling or inappropriate shipping and packing.”

Art is vulnerable in motion and at rest

Approximately 60 percent of insurance claims for damaged art are related to its transport; global art history includes many stories of damaged or lost masterpieces. Negotiated in 1963 by then-First Lady Jacqueline Kennedy, the agreement for the Louvre to ship the “Mona Lisa” to the National Gallery of Art in Washington D.C. on loan was highly controversial at the time. Despite the uproar and subsequent scare when a malfunctioning sprinkler nearly soaked the iconic da Vinci portrait at the Metropolitan Museum of Art, the excitement generated by its exhibition tour inspired other collectors and museums to begin sharing great works.

“With art, often the piece you own is one of a kind. If you suffer a traumatic loss like that, you do not want to compound it by not being fully compensated for the value of the item.” – Bill Gatewood, Burns & Wilcox

In 2001, Rembrandt’s “Portrait of an Elderly Woman,” painted circa 1640, was accidently slashed when dropped en route from Moscow to Houston. In 1998 a horrific plane crash in the Atlantic Ocean, just miles off the coast of Nova Scotia, claimed the lives of over two hundred passengers and destroyed Picasso’s 1963 painting “Le Peintre,” which was in the cargo hold.

While incidents involving renowned masterpieces garner widespread coverage, lesser-known but still precious pieces of art also sustain damage from being displayed and transported, with unfortunate frequency. In particular, privately-owned works shown in collectors’ homes or in other private venues face unique dangers. In February, a Jean-Michel Basquiat painting worth over $110 million was damaged when children threw Corn Flakes and milk at it while it was on display on a yacht. Displaying priceless art and antiques aboard yachts is a popular practice, despite intrinsic weather- and cereal-related hazards.

Billionaire Steve Wynn has owned two Picasso paintings damaged while on display: one when Wynn put his elbow through it, and the other in unexplained circumstances in a gallery. “Sometimes artwork has been inappropriately hung and it falls off the wall,” Gatewood said. “And many times, not only is it the art itself at risk, but also the frame. In one case the art and the frame together fell on antique glassware, creating a huge claim.”

How art collectors can reduce risks

“My suggestion for people who purchase fine art is to protect their investment,” said Gatewood. When it comes to protecting art, owners and collectors have options. Heather Posner, Associate Vice President, Director, Private Client Practice Leader, Burns & Wilcox, notes that experts have plenty of advice when it comes to preserving artwork. For example, tips on how to minimize damage from sunlight, display lights or other perils that could damage art when collectors think their art is safely displayed.

“Some (fine art insurance) policies might say a piece is covered only if a professional art mover is hired.” – Gatewood

“Specialized insurance companies and agents have a broad background in providing risk management to collectors,” Posner said, adding that risk management experts can help owners avoid hazards like displaying artwork beneath upstairs bathrooms or above fireplaces where they are more likely to suffer damage.

Art collectors can also benefit from investing in safety measures such as professional hanging and specialty transportation. “Some (fine art insurance) policies might say a piece is covered only if a professional art mover is hired,” Gatewood pointed out, suggesting that collectors consult their insurance agents and brokers for recommendations.

Be aware of what coverage conditions apply

Buyers new to art collecting are often surprised to learn that a standard Homeowners and Dwelling Insurance policy does not include coverage of their works of fine art. “A Homeowners Insurance policy is not enough,” Posner said. “Even if (your holdings are limited to) one piece of art, you are going to want a Personal Articles Floater policy.” She emphasized the importance of purchasing Personal Articles Floater coverage as soon as you acquire a piece of art, to ensure that your investment is protected during its initial shipment.

Experts also advise art collectors to speak with their insurance brokers or agents to gain a thorough understanding of what Personal Articles Floater coverage for their fine art includes and requires. “You want to specify that you have breakage on the (Personal Articles Floater) policy so that if you drop (your artwork) or mishandle it, or someone else does, your investment is covered,” Gatewood said.

“A Homeowners Insurance policy is not enough. Even if (your holdings are limited to) one piece of art, you are going to want a Personal Articles Floater policy.” – Heather Posner, Burns & Wilcox

“With art, often the piece you own is one of a kind,” Gatewood noted. “If you suffer a traumatic loss like that, you do not want to compound it by not being fully compensated for the value of the item.” He added that coverage for fine art can take the form of an endorsement added to an existing Homeowners and Dwelling Insurance policy or a Personal Articles Floater.

Coverage and policy assessments take the artwork’s location into account. Not all privately-owned artwork is displayed in homes, offices, yachts or storage spaces. Many privately-owned artworks are loaned to galleries and museums, either permanently or temporarily. Most museums only display 2 to 20 percent of their collections and storing artwork is also common among private collectors, evidenced by the more than 1,000 Picasso works currently in storage in Geneva. “You cannot assume that whatever policy you have is going to cover your art in different locations,” Gatewood said. “Talk to your risk manager and your insurance broker or agent to ensure that your art is going to be covered for the location where (it is kept).”

Coverage can even be affected when art is moved to a new display area within the same home. “Make sure that the (display) destination is a covered location under your policy,” Gatewood said. “And make sure that the people who are handling your art—packers, shippers and galleries—show you proof of insurance as well.”

Document and track your collection

Gatewood suggests collectors maintain a complete catalog of their artwork, including the history of each item, its value and its location. Posner added that to keep valuations current, collectors should have their artwork appraised every three to five years, so increases in value can be recorded. “Many (Personal Articles Floater) policies also provide some flexibility in terms of how much of an artwork’s value it can cover,” Posner said. “Some cover up to 150 percent, so it is important to understand the terms of your policy.”

Art collecting can be a smart financial investment as well as personally fulfilling; however, consult your insurance agent or broker to be certain your personal and financial investment is protected in the event of loss or damage.

As with any coverage need, an insurance broker or agent must be consulted.

This information was provided by Burns & Wilcox, North America’s leading wholesale insurance broker and underwriting manager. 

Learn more about Personal Articles Floater coverage, a Homeowners and Dwelling Insurance endorsement or Private Client coverage that might be right for you.