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Do Artists Need Special Insurance? A Special Report By Caren Hackman

The Rickie Report receives numerous calls and emails from artists regarding business issues they deal with.  A common concern is insurance.  We asked Caren Hackman, a fine artist and owner of a graphics business to interview Sheryl G. Wood, Esquire on this topic.  Please note: This is not intended as legal advice. Any advice will always depend on the specific facts and circumstances of a particular situation. We share their discussion here.

 

 

 

Insurance for Artists

Q and A

with

Caren Hackman, Fine artist 

 

and

Sheryl G. Wood, Esquire

 
Representing Collectors, Artists, Dealers and those with an interest in the Business of Art

 

 

 

CarenHackmanSherylWoodcertificatenyu-art-cert

Please note: This is not intended as legal advice. Any advice will always depend on the specific facts and circumstances of a particular situation.

 

 

CH: Insuring artwork and the contents of my studio makes sense but the task is daunting. Can you help clarify the process?

 

 

SW: Looking into insurance coverage for a professional artist is a sound business move. The cost of business insurance is not prohibitive, however, replacing your studio and not being able to work are. You may have a homeowner’s policy if you work in the home, but be sure to read your policy, they typically only provide up to $2500 for business equipment or no coverage at all for business related assets. It is estimated that less than one third of artists have their works covered under business insurance.

 

There are three types of coverage you may want to consider:
• For Buildings, to cover the physical structure of your studio;
• For your Personal Property, to cover the contents of your studios such as tools, equipment, raw materials, works in progress, finished works, important papers and electronic records; and finally,
• Business Interruption, that covers loss of business income due to time studio is closed for an emergency.
If you can’t afford complete coverage, purchase what you can. Some is better than none. But carefully assess what you need and avoid unnecessary coverage. It is important to insure all works in the studio, including works in progress.

 

 

CH: How will the insurance company determine what rates the artist pays and what is covered?

 

 

SW: An insurer will determine insurance based on the artist’s stance in the marketplace. What do the paintings, sculptures, or works on paper sell for? If an artist is dealing with a well-established gallery, they should have coverage spelled out in the consignment agreement. However, even some of the established galleries may require artist coverage so they don’t end up covering those losses. Larger insurers typically cover mid-level to blue chip level artists. The reason is that it is easier to underwrite them. An insurance company looks at the way your art is consistently handled. For instance, do you transport your art in a vehicle vs. using a professional shipper and do you make individual miscellaneous sales vs. selling your work through galleries and auction houses.

 

 

 

CH: So how would an artist find insurance for his or her artwork?

 

SW: Finding a good broker is important, and you can ask colleagues or friends who they use. You need to feel comfortable with whoever you choose, so it’s okay to shop around and get a few quotes. You might decide to go with a broker who represents a specific company or companies, or to go with an independent broker who directly represents you in the marketplace. If the works are very valuable, it is important to speak to a broker that specializes in fine art insurance, they can better dictate how a claim is handled. I spoke to independent broker Sarah Court, sarah.court@aon.com from the Aon Private Risk Management Insurance Agency in Miami. Aon specializes in Fine Art Insurance Coverage worldwide.

 

 

CH: Will an insurance company cover the all of the artist’s works, both finished and works in progress?

 

 

SW: For works in an artist’s studio, at a minimum, the works need to be insured to cover your cost of materials and time you have put into the piece. Premiums are based on risk and the value of those works. You will also want to advise your broker if you are represented by a gallery or receive a commission to do one or more works, whether from an individual or gallery. Schedules of the works will become a part of the policy, and the policy needs to have a rotation schedule as new works come on and others are sold. Individual works should be well documented with a photo and description of work including the title if any, subject, date made, dimensions, medium, condition, frame, special notes about the work, any history of exhibitions or mention in periodicals or electronic media.

 

 

CH: Could you give me the names of some insurance companies that cover artworks about which you have knowledge?

 

SW: There are a handful of insurance companies that specialize in fine art coverage, all of which would need a broker such as Aon to access. Generally, premiums run between $1000 to $10,000 annually for $1,000,000 to $2,000,000 in coverage. The policies tend to cover theft, weather and other emergency damage, and damage in installation, deinstallation and transit.
AXA, www.axa-art-usa.com
XL Catlin, http://xlgroup.com/insurance/insurance-coverage/specialty-insurance/fine-art
Aspen Insurance, https://www.aspen.co/Insurance/Insurance-lines/Marine-Aviation-Transportation/Specie-and-Fine-Art/
Ironshore, http://www.ironshore.com/usa/fine-art-specie/c47
Berkeley Asset Protection, http://berkleyassetpro.com/products/fine-art-and-collectibles-insurance/

 

 

CH: Are there other avenues that an artist might consider when shopping for insurance?

 

SW: Another avenue for a smaller art business is to check for coverage from an industry specialist such as American Crafts.

 

www.studioprotector.org

 

The policies are relatively inexpensive and offered by different groups dependent on your medium, based on your needs, and can include Business Contents Coverage – On & off premises Coverage for Goods While at Shows & In Transit, Coverage for Tools, Equipment, Product Inventory & Supplies at installation sites, in transit and away from your premises. It would be a good idea for all artists to view this website for good tips for safekeeping your artistic records and keeping your artwork safe and secure. http://studioprotector.org/. The Studio Protector is the first product of the Coalition for Artists’ Preparedness and Emergency Response, a national task force that was formed in 2006. There is a lot of information, so check it out.

 

 

CH: Sheryl, thank you so much for sharing your knowledge with us. How can you be reached if readers have further questions?

 

 

SW: You are very welcome. I can be reached at artlaw@earthlink.net.

 

This article is a Copyright of Sheryl Wood and Caren Hackman 2015

 

 

 

Additional information about signing agreements for exhibit and art insurance can be found at

http://carenhackman.com/blog/the-big-art-insurance-question/

 

 

Sources:
Sarah K. Johnson Court | Director | Global Fine Art Practice
Aon Private Risk Management Insurance Agency, Inc.
1001 Brickell Bay Drive | Suite 1100 | Miami, FL, 33131
Direct: 305-961-6126 | Cell: 305-608-6375
Toll Free: 866-225-5266 FREE
sarah.court@aon.com | aon.com
CERF+ Craft Emergency Relief Fund + Artists’ Emergency Resources
http://www.studioprotector.org/

 

 

 

For more information about Caren Hackman:

Caren Hackman is a graphic designer and fine artist living in Palm Beach Gardens, FL. and author of a book about Graphic Design and Good Business practice: http://www.carenhackman.com/book/.

Be sure to check out Caren’s wonderful artwork – Caren is a talented artist in her own right! She is a founding member of the Artists of Palm Beach County.

www.carenhackman.com

 

 

 

 

For coverage of your events, to place an advertisement, or speak to Rickie about appearing in The Rickie Report, contact:

Rickie Leiter, Publisher

The Rickie Report

P.O.Box 33423

Palm Beach Gardens, FL 33420

Rickie@therickiereport.com

561-537-0291

To read previous posts, click TheRickieReport.com and scroll down.