Donna Anderson: Exhibition Alliance on Art Insurance

Art insurance for artists, exhibitions, and museums.

Olympia International Fine Art and Antiques Fair, Getty Images
••• Art insurance covers installation of an exhibition. Here, workmen set up the Olympia International Fine Art and Antiques Fair on June 8, 2011 in London. Photo by Oli Scarff/Getty Images

Donna Anderson, Executive Director of The Exhibition Alliance (TEA), kindly answers questions regarding art insurance for art exhibitions and museums.

According to TEA's website: "The Exhibition Alliance, a non-profit organization, strengthens the arts community through the provision of professional exhibition- and collections-related services." TEA also "offers a low-cost temporary exhibition insurance which covers traveling exhibitions and short-term, temporary projects in New York and New Jersey."

What is art exhibition insurance? Who should buy art exhibition insurance?

"Museums need a variety of insurance coverage which address different areas of risk for the institution. Three basic types of coverage include:  liability insurance (to protect the organization against claims arising from personal injury of visitors and employees); building insurance (to provide coverage to the structure and its contents in case of fire, flood, or other damage to structures); and fine art insurance (that provides coverage based on appraised values for collections—art and artifacts—in the event of damage or loss)."

"Fine arts insurance is important because it addresses the full monetary value of collections. For example, building insurance may cover damage or loss from fire or flooding, but this coverage is often based on weight or on factors other than the appraised value of artwork. As part of their fine art insurance, some institutions may also choose to obtain coverage for damage or loss arising from terrorist, wind and flood activity that may not be covered under a standard fine art insurance policy.

  Fine art insurance can be purchased from agents that each has their own terms, rates, and underwriters."

"NOTE: Organizations may have other types of insurance as well as the policies mentioned above, including automotive coverage for museum vans or other vehicles and directors and officers’ insurance, which covers the director and the board of trustees from damages resulting from litigation against the museum for various causes.

Museum employees may be covered by health insurance and disability insurance as well."

"Fine arts insurance should be obtained by any organization that holds a collection of art or artifacts in the public trust."

What does fine art insurance cover?

"Usually fine art insurance covers an institutional collection based on an appraised or market value for specific objects provided to the insurance agent. Property on consignment, loan or entrusted to the Museum shall be insured at those values agreed upon between the Museum and the owner (as outlined in the Loan Agreement)."

"The coverage generally covers collections inside the museum, but “wall-to-wall” coverage may be obtained to cover collections or exhibitions while they are lent to other institutions (that is, the art is covered at all times, even if it the artifact is off site). If a museum chooses to travel a piece for an exhibition from its collection, it is important to check with its insurance agent to be sure that it does have coverage for the art/artifacts when they are off site. It may be possible to obtain a “rider” or extension of the coverage if necessary. Museums may choose to cover the full or partial value of the collection—a decision that has financial repercussions in the short as well as the long term."

"If the museum is borrowing an exhibition, insurance may be provided through the lending institution as part of the borrowing fee, or the museum may choose to obtain a “rider” on its own fine art policy to cover the appraised value of the exhibition. It is also possible for New York State institutions that are non-collecting organizations (such as some college/university galleries, art spaces, or libraries) to obtain location insurance coverage for temporary exhibitions through The Exhibition Alliance."

"It is important to note that insurance companies will want to know, not only about the collection and its value, but also the conditions in which the museum keeps and displays the art/artifacts. A facility report must be submitted to the insurance agent so that the exact nature of the site can be evaluated in terms of risk.

A standard AAM facility report will include questions about the museum’s construction, light levels, environmental conditions (including heating/cooling and relative humidity levels), security, fire protection, and the professional staff."

"The insurance industry knows that museum professionals have ethical standards and best practices in which staff are trained and expect that careful handling, storage, and display standards are met."

How much does it cost? Is there a sliding scale?

"The costs for fine art insurance vary, depending on factors such as the appraised value of the collection, the location of the museum, security, and the condition of the museum’s facilities. Most Fine Arts Policies do not have co- insurance and therefore Museums sometimes may choose to insure their collection for a partial value of the art/artifacts, which does expose the museum to some level of risk should there be an incident where damage or loss to the collection occurs."

How does one choose the correct policy?

"Many fine art insurance agents are former museum professionals who have a clear understanding of museum collections, best practices, and challenges. Your insurance agent—once you select a company to provide coverage—should be considered an important partner with the museum staff."

"The agent can provide information, suggestions, or solve problems regarding coverage, the implications of traveling the collection, as well as preserving and conserving it. Having an open and honest relationship with your agent will provide you with the best information on which to select your policy."

"From the museum’s point of view, the selection of a policy should involve the museum’s board of trustees, as well as the director and collections manager/registrar. Given the importance of fine arts insurance and its relationship to fundamental issues of public trust, the board should have a clear idea of risk and coverage, based on information provided by staff. Once the board chooses an insurance policy, the director and the collections manager handle the day-to-day decisions and paperwork."

How long does the coverage last?

"Each insurance company has its own terms, but generally fine art insurance is renewed annually, with regular premiums charged through the year. Location insurance for temporary exhibitions—including that provided through TEA—has a shorter term, which may include the arrival, installation, display period, and deinstallation of the exhibition. It is important to plan ahead to obtain the policy well in advance of the arrival of artifacts for the exhibition to ensure that coverage."

What happens if you are the organizer/participating artist/installer and don't have coverage? Who is responsible for damage costs?

"As noted above, there are some options for institutions to obtain location insurance for their site—if they meet facility requirements for the exhibition and the art and artifacts are not excluded from coverage (for example, TEA’s location insurance will not cover electronic equipment or outdoor exhibitions)."

"An artist may obtain coverage through TEA for a particular piece or pieces—again, if the site in which they are displayed meets facility requirements and is not ineligible for coverage because of exclusions. It is important to note that each site at which a work of art or artifact is shown must be approved by the insurer under the terms of location insurance."

"Museum staff members are trained in appropriate art handling and display techniques generally approved by conservators and registrars. It is important that museums embrace these standards and continually train and supervise employees in appropriate handling and mounting artifacts. Naturally, art and artifacts are most vulnerable during periods of handling and installation/deinstallation, and the risk of damage increases during periods of handling and mounting. These activities should always be supervised by a collections manager/registrar, curator, or director who has experience in exhibitions work; questions or approaches to handling could then be discussed or addressed directly with the installation team."

"When accidental damage occurs, it is important that the preparator inform the collections manager/registrar, curator, or director immediately so that actions can be taken to appropriately document the damage and inform the insurance agent, who will provide guidance for the next steps."

"Claims are usually processed by the museum staff with the insurance company, who will work together to obtain information about conservation or determine costs related to the loss of an object that has been damaged beyond repair. It is in these instances that full fine art insurance is most important, though the museum will always be responsible for a deductible, which ranges in cost depending on the specific terms of the fine art insurance coverage."

"Consulting preparators or installers may assume that an institution has fine arts insurance and that while they are working in the gallery they are covered by the terms of that policy. Prior to working with the organization, consultants may wish to ask about fine arts insurance coverage to ensure that any damage would indeed be covered under the institutional policy."

"If the institution does not have fine arts insurance the consultant would then need to assess whether they are willing to take the risk of paying for damage that might occur even through careful handling.  For example, even preparators with training and experience may encounter some artifacts that have flaws from construction, previous use/wear, or even inherent vice (problems that are due to natural degradation of materials or conditions in which different materials in the same object weaken the fabric of the artifact). It may be impossible to anticipate problems in these cases before they occur, and risks (and associated costs) may be difficult to gauge in advance of problems." 

"Having conversations prior to starting the installation clarify the relationship between institutional responsibilities and expectations from consultants and borrowers—including artists. Most Fine arts policy allow you to waive rights of subrogation against third parties. This would include art consultants, independent art handlers, packers and shippers. These working partners generally do not include the cost of insuring your art in their fee so therefore require the waiver. If a waiver is not obtained, the insurance company has the right to pursue any party that was negligent in the handling of the artwork."

Answers provided by Donna Anderson, Executive Director, The Exhibition Alliance with assistance from Ellen Honer Ross, Senior Vice President, Arthur J. Gallaher & Co.

Interview conducted February 2014.