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SATURDAY EVENING POST
March 1st, 2025
The concept of insuring artworks can be traced back to the broader history of insurance, but dedicated art insurance as a niche emerged in the late 19th century. Prior to that, art collectors and institutions largely relied on general marine or property insurers (or simply hoped for the best) to cover losses during transport or display. This began to change as the art market grew and artworks travelled more frequently. In 1890, the world’s first bespoke art insurance firm, the Fine Art & General Insurance Company Ltd was established in London by art dealer William Agnew. This company’s founders and directors included prominent artists of the day, who understood the unique risks art faced. They offered coverage for major museum collections (like the South Kensington Museum) and high-profile exhibitions (such as the 1893 Chicago World’s Fair). The early success of this firm demonstrated the demand for specialised coverage and helped inaugurate a robust cultural risk-management sector.
Throughout the 20th century, art insurance evolved in response to significant events and growing appreciation of art’s value. The world wars and incidents of art looting showed8 the need for financial protection of cultural property. Museums and private collectors increasingly turned to insurers to safeguard their collections against theft, fire, and transit damage. By the mid-to-late 20th century, major insurance companies began offering fine art policies, and specialist insurers appeared in the market. High-profile art crimes and disasters also shaped the field. For instance, the 1990 Isabella Stewart Gardner Museum theft, the largest art heist in history, famously revealed that the museum had no theft insurance on its $500 million worth of stolen masterpieces. The museum had opted out due to prohibitive premiums (which were estimated to exceed its entire operating budget) and the founder’s stipulation that stolen works could not be replaced. Such events prompted industry-wide discussions on balancing the cost of premiums versus the priceless nature of certain artworks. Over time, museums and governments developed alternatives like indemnity schemes (the UK’s Government Indemnity Scheme, the U.S. Arts and Artifacts Indemnity Act of 1975, etc.), where the state assumes financial risk for loaned artworks to facilitate exhibitions without exorbitant insurance costs. By the 21st century, art insurance had matured into a specialized global market with established practices for valuation, risk assessment, and loss prevention, building on over a century of experience.
The art insurance industry today is a robust international market, closely tied to the art market’s expansion. In the aftermath of the 2008–09 financial crisis, art sales rebounded strongly, with frequent record-breaking auction results. This boom in art values and the globalization of collecting have driven increased demand for insurance. As more wealthy individuals view art as an asset class, and new collectors emerge in regions like China, India, and the Middle East, insurers report growth in policies for private collections and museums worldwide. In China, for example, a proliferation of new museums, much of it privately funded, has created rising need for coverage of institutional collections. Even in the U.S. and Europe, where many museums have static or government-backed coverage, rising art values force higher coverage limits to adequately insure collections.
Many leading firms have dedicated art insurance divisions, and the industry is competitive, and insurers differentiate themselves via tailored coverage, appraisal expertise, and risk management services. The cornerstone of art insurance is the “all-risk” fine art policy, which covers loss or damage from almost any sudden and accidental cause (except enumerated exclusions like war or nuclear events). Unlike standard homeowners’ insurance, fine art insurance is highly customized and values each item or collection individually. Coverage typically applies worldwide and follows the art “nail-to-nail”, meaning from the moment it leaves its location, through transit, exhibition, and until safely returned or installed, thereby covering shipments and loans comprehensively. Policies are often written on an agreed value basis: the insurer and owner agree on the artwork’s value upfront (often based on appraisals or purchase price), and in the event of a total loss, that agreed amount is paid out, avoiding haggling over market value after the fact. Partial losses (damage) are usually covered by paying for professional restoration and any resulting loss in value. For example, if a painting is restored after damage but its market value diminishes, the policy can compensate the owner for that loss of value, which is a feature that proved crucial in cases like Steve Wynn’s damaged Picasso, where insurers faced a claim of $54 million for diminution in value after restoration.
In addition to all-risk coverage for physical loss, the industry offers specialized products: title insurance for art (protecting against defective ownership title or theft claims, like real estate title insurance), transit-only policies for one-off shipments, and exhibition insurance for short-term shows. Liability coverage is usually separate, for example, a museum would need general liability insurance for visitor injuries, but art policies sometimes include liability if, say, an artwork on loan injures a third party or causes property damage. By and large, fine art insurers focus on protecting the object’s value rather than liability exposures. Premiums are determined by factors such as the total insured value, the locations (permanent and transit routes), security and environmental controls, and the owner’s loss history. Insurers often mandate or strongly encourage risk mitigation measures (alarm systems, climate control, professional packing and shipping) as part of the coverage agreement.
Perhaps counterintuitively, theft is not the top cause of art insurance claims. Industry data indicates that mostlosses occur during transit. Roughly 85% of claims stem from artworks being accidentally damaged in transit. When art is safely hanging on a wall in a secure home or museum, the risk of damage is relatively low, but whenever it’s moved, packed, or shipped, vulnerabilities spike. Apart from transit damage, another significant risk is damage from natural catastrophes. Hurricanes, floods, and wildfires have increasingly impacted art collections, recent events like hurricanes hitting Florida and fires in California have put insurers on alert. Many collectors now purchase add-ons or separate riders for earthquake or flood coverage, especially if they live in disaster-prone regions, and museums in major cities even consider terrorism coverage for high value works (a practice that grew after 9/11). Fire (whether from electrical faults, old wiring in historic buildings, or wildfire embers) is a perennial concern, modern museums often invest heavily in fire prevention to complement their insurance.
And while theft isn’t the number one claim source, it remains a critical insured peril, from high-profile museum heists to home burglaries targeting valuable art. Insurers sometimes offer discounts if owners install sophisticated theft protections or keep especially valuable pieces in vaults. Lastly, fraud and forgery pose a more abstract risk: if a supposedly valuable artwork turns out to be fake, insurance may not cover the “loss” in value (since the item was never genuinely worth what was insured). Recent lawsuits illustrate this point – in one 2022 case, owners of alleged Basquiat paintings (seized as forgeries by the FBI) filed a $19.7 million claim, only to have insurers seek a court ruling that forgeries are not “covered property” (essentially arguing that a fake with no authentic value cannot be insured for millions). This kind of dispute highlights the importance of expertise and due diligence in underwriting art risks.
Insurance for Art Collector
Private art collectors form a large client base for fine art insurers. Wealthy collectors often accumulate paintings, sculpture, antiques, rare photographs, and other collectibles that may not be fully covered under a standard homeowner’s policy. A typical homeowner’s insurance might cap coverage for art or collectibles at a modest sum or exclude mysterious disappearance and breakage, gaps that could leave a collector dangerously underinsured. Thus, dedicated collector’s policies are designed to cover the unique needs of private collections. These policies usually provide worldwide “all-risk” coverage, meaning the artworks are protected whether on the walls of the owner’s home, in storage, or in transit to another location. Covered risks include accidental damage (such as a fall from a wall, or an accident while handling), theft, fire, water damage from leaks, vandalism, etc., with very few exclusions. As noted, insurers often work with collectors to agree on values for each item or for the collection, ensuring that in the event of total loss, the owner receives 100% of the agreed value.
Collectors are advised to maintain up-to-date appraisals and inventory records. Valuation can be tricky in the volatile art market – values may rise or fall over time, so policies often allow periodic adjustments or “market appreciation” clauses. Some policies automatically cover newly acquired pieces for a certain period (e.g. 90 days) to allow the collector to report and add them, so that new purchases are immediately insured. In the claims process, expertise is key. If a loss occurs, insurers may bring in independent appraisers or art experts to confirm the value and extent of damage. A famous example of a collector’s claim is Steve Wynn’s incident with Picasso’s Le Rêve: after the painting was accidentally elbowed and torn, Wynn’s fine art insurer covered the $90,000 repair, and he claimed around $54 million for the loss in value (since he had a sales agreement valuing it at $139 million prior to damage). This case highlights how fine art policies can indemnify not just the cost to repair but the financial loss resulting from a diminution in the artwork’s stature or condition.
For collectors, another concern is title risk, the possibility that a purchased artwork might have a stolen or looted past, which could lead to legal claims from original owners. Standard art insurance usually excludes title disputes; however, specialized title insurance policies (offered by a few firms) can be purchased to protect against ownership challenges.
Collectors must also navigate transportation carefully. If lending a piece to an exhibition or moving art between homes, a collector will either rely on their policy’s transit coverage or require the party in charge (such as a museum borrowing the work) to carry insurance. Given that transit accounts for the lion’s share of claims. collectors often insist on professional art shippers, climate-controlled trucks, and even couriers accompanying extremely valuable works to minimize risks. Insurers may mandate or give premium credits for such precautions. Ultimately, art insurance for collectors is about individualized protection: “No two collections are alike,” as one industry expert put it, so policies are highly personalized.
Museums, galleries, and other art institutions approach insurance from an institutional perspective. While collectors worry about a dozen or a hundred items, major museums hold tens of thousands of works, often of irreplaceable cultural significance. Museums typically have a blanket policy covering their permanent collections, plus additional coverage for art on loan (incoming or outgoing). However, when those museums loan pieces to other venues, or borrow works for special exhibitions, insurance comes into play via loan agreements. A “nail-to-nail” clause is standard: the borrowing institution must insure the object from the moment it is removed from the lender’s wall until it is returned and re-hung in place.
This nail-to-nail insurance is usually all-risk and often arranged by the borrower’s insurer in the name of the lender, so that if anything happens, the lender can be made whole. For traveling exhibitions with multiple venues, a single policy may cover the entire journey, or each venue might insure during its leg of the exhibition, it depends on contract specifics. In some cases, government indemnity programs step in for instance, the UK and USA have programs that provide state-backed guarantees for high-value loans, allowing museums to avoid paying hefty premiums to commercial insurers (these programs typically still require museums to practice top-tier security and handling, and they carry a deductible).
Commercial galleries (which buy, sell, or exhibit art, often on consignment) have their own insurance needs. A gallery’s inventory, including artworks owned by the gallery and those on consignment from artists or collectors, needs coverage similar to a collector’s policy but tailored for a business. This often falls under a fine art dealer’s block policy, covering stock anywhere in the gallery, in storage, or in transit to art fairs and clients. Galleries also usually need liability insurance (for visitors to the gallery space and for errors & omissions, such as accidental damage to consigned art due to the gallery’s handling).
Both museums and galleries invest heavily in risk mitigation as part of their insurance strategy. Insurers reward institutions that have modern security systems (alarms, surveillance, access control) and museum-standard fire protection (fire suppression that won’t damage art, such as clean agent systems instead of water sprinklers in painting storage areas). Museums are also very proactive with climate control, maintaining stable temperature and humidity to prevent gradual deterioration. While gradual deterioration (like slow water damage, pest damage, or inherent vice) is usually excluded from insurance (since insurance covers sudden incidents, not predictable wear), maintaining good environmental conditions helps avoid conservation issues that could lead to claims (for example, a painting’s paint layer cracking due to humidity swings might not be covered if it’s deemed preventable). Insurers often inspect museum facilities and review loan protocols before underwriting large policies.
A crucial part of museum insurance practice is the loan agreement between lender and borrower. This document specifies who is responsible for insurance and to what value. A lender (say a private collector or another museum) will often dictate an insurance value for each piece and require evidence of coverage. Disputes can arise if a piece is damaged during a loan, determining the loss in value can be contentious.
Museums also benefit from scholarly case law and best practices that have developed. International conventions (like immunities from seizure for loaned art) and national laws (like bailment laws for consignees) intersect with insurance. For instance, if a borrowed piece is seized in a legal claim (say an allegation that it was stolen from someone decades ago), the insurance may need to respond if the piece cannot be returned, though typically such legal seizures are beyond the scope of standard policies, which is why museums secure immunities or special coverage. In everyday practice, however, museum insurance claims often involve more ordinary mishaps: a visitor accidentally knocks over a sculpture, an artwork is scratched during installation, or a shipping crate is dropped. In these cases, the insurer coordinates conservation efforts. An example of risk management paying off is the J. Paul Getty Museum in Los Angeles: it was threatened by wildfires in 2017-18, but its building was designed with non-flammable materials, air filtration, and its own water reservoir for fire suppression. These precautions protected the multi-billion-dollar collection and avoided insurance losses, demonstrating how robust engineering and planning can complement insurance coverage, especially as natural disaster threats grow.
We express our appreciation to Acera Insurance, our insurance sponsor, for their partnership in bringing our current significant Jack Bush celebration to the public. Their commitment provides crucial stability and ensures that we can present this exhibition with the assurance and excellence it deserves.
With decades of expertise, Acera Insurance is a trusted leader in fine arts protection, offering comprehensive and customized insurance solutions. Partnering with the world's top insurers, they provide specialized advice to safeguard valuable collections. Acera's offerings include flexible worldwide coverage, protection for items in transit, automatic coverage for newly acquired pieces, and replacement cost options. They also extend coverage to natural catastrophes such as floods and earthquakes, ensuring complete protection for art collectors and institutions.
Contact: Farzina Coladon
Insurance for Artists
While often overlooked, working artists have their own set of insurance considerations. An artist’s studio can contain valuable property: finished artworks waiting to be sold or exhibited, works in progress, supplies, equipment, and personal collections of reference material. If a fire, flood, or theft strikes the studio, it can be financially devastating to the artist. Art insurance for artists is typically structured to cover studio contents and inventory. This can include the art pieces themselves (sometimes insured at the selling price or at least cost of materials plus labour), as well as tools (e.g. cameras, sculpting equipment, printing presses) and materials. Policies tailored to artists might be offered as part of a business owners’ package or as a standalone fine art policy for a “studio.” For instance, some insurers have special programs for artist studios that cover not only the art, but also office contents, computers, and even up to a certain amount of intellectual property coverage (like portfolios, image archives, etc.).
Artists frequently ship their works to galleries, clients, or art fairs. While in transit or on exhibition, the question arises: is the work covered under the artist’s insurance, or does the venue’s insurance take over? Often, galleries will insure consigned works while in their custody (and this should be clarified in consignment agreements). However, if an artist is sending works to a non-commercial venue or hand-carrying works to a fair, they may need to arrange their own transit insurance. Many artist-focused policies provide transit coverage or allow artists to easily add a rider when needed (since shipping art is routine in an artist’s life). Similarly, when participating in a pop-up exhibition or art festival, artists might need public liability insurance in case a visitor is injured by their display – some venues require proof of such coverage. (There are even niche insurers that offer short-term liability policies for artists at fairs or shows.)
An additional facet is installation coverage. Contemporary artists who create large installations or site-specific works face the risk of those pieces being damaged during setup or by the elements if outdoors. Insurance can cover those risks, though sometimes specialised underwriting is needed if the medium is unusual (art made of ice or living plants). As creators, artists also have an emotional stake in their work’s safety. Insurance can at least provide the financial support to rebuild a career after a disaster. For example, if a sculptor’s entire show is ruined in transit, insurance could reimburse the artist for the market value of those works, giving them the funds to remake pieces or cover lost income. Without insurance, such an event might force the artist out of business.
A recent and devastating fire that ravaged the home and studio of our artist Raymond Clements has sent shockwaves through our community. The flames consumed not only his personal sanctuary and his countless irreplaceable works of art throughout his career, but also the creations of other artists that Clements had so carefully collected and curated.
For an artist, a studio is far more than just a workspace, it is an extension of their soul, a place where inspiration is transformed into form and colour. To see it reduced to ashes is a profound tragedy, a reminder of the fragility of art and the permanence of loss. As artists, collectors, and institutions, we invest not only financially but also emotionally and culturally in the art we create and preserve.
The amalgamation of art, law, and insurance is complex, involving contract law, property law, and even international regulations. Insurance contracts for art are subject to the general laws of insurance in whatever jurisdiction they are written. This means issues like uberrima fides (the duty of utmost good faith) apply, applicants must fully disclose relevant information about the artwork (provenance, existing damage, security conditions) or risk the policy being void. Given the high values involved, insurers thoroughly vet proposals and may include warranties in the policy (e.g. a warranty that a painting will always have an alarm set when the home is unoccupied, or that a work on loan will be accompanied by a courier). Breach of such conditions can nullify coverage, which has led to disputes in court when losses occur, and insurers invoke technical defences.
In most countries, insurance is a regulated industry (e.g., state insurance departments in the U.S., the FCA in the UK), but there aren’t usually art-specific insurance laws, rather, art insurance must comply with standard insurance regulations (like rate and form approval, licensing of brokers, etc.). One area of regulation that does affect art policies is sanctions and trade restrictions: insurers will include clauses excluding coverage if paying the claim would violate sanctions or if the artwork itself is contraband (for example, an insurer will not pay for a confiscated piece of illicit antiquity or for damage to art illegally imported in violation of import/export laws). Additionally, the movement of art across borders involves customs law; insurance policies typically require the insured to comply with legal transport requirements, or coverage could be voided if, say, the art was smuggled. The field of art insurance is continuously evolving, facing new challenges and leveraging new innovations to keep pace with the art world’s changes. Here are some key issues and trends shaping its future.
One major challenge is the rise of climate-related risks. As climate change leads to more frequent and severe natural disasters (hurricanes, wildfires, floods), collections around the world are increasingly at risk. Insurers have observed what one expert called “rolling disasters” becoming a “new normal”, with year after year of catastrophe losses. This trend is forcing higher premiums and stricter underwriting in high-risk areas. For example, insurers might limit coverage or require costly flood defences for galleries in low-lying coastal zones or insist on wildfire mitigation (like cleared brush and fire-resistant construction) for homes with valuable art in fire-prone regions. Some insurers are even collaborating with climate scientists and sponsoring research on climate change impacts to better model future risks. The flip side is that art owners are also becoming more risk-aware: museums develop detailed disaster plans, and collectors in hurricane zones might relocate art seasonally or invest in safe storage. In the long term, the industry may see parametric insurance solutions for certain disasters, policies that pay out a set amount if a trigger event (like a flood level or wind speed) is reached, which could simplify claims for catastrophe losses. Climate change also raises tough questions: how to insure heritage sites or frescoes that cannot be moved? How to price policies when previously “once in a century” events happen a lot more often? These are issues actuaries and underwriters are grappling with now.Another emerging risk is the evolving nature of art itself. Contemporary art can be made of unconventional materials (fragile installations, digital components, even live elements) that don’t fit traditional insurance categories. Insurance policies and appraisal practices will need to adapt to cover, say, a video installation stored on obsolete technology, or a conceptual art piece that exists as a certificate rather than a physical object. A positive outlook is the increasing expertise in the field. Once a very niche specialty, fine art insurance knowledge is now more widespread. There are professionals who are cross trained in art history and insurance, and resources like Art Loss Register, IFAR (International Foundation for Art Research), and Art Title databases that help insurers make informed decisions. This trend will likely continue, making the insurance process smoother for clients because underwriters “speak the language” of art more fluently than in decades past. We also see more collaboration between insurers and the art community, for example, insurers sponsoring exhibitions, both as a marketing move and to stay closely connected with the community they serve.
Current Exhibition
JACK BUSH: FLAUNTING THE RULES
A message from our Insurance Sponsor for this exhibition
At Acera Insurance, we’ve been serving the fine arts community for decades. Partnering with the world’s leading insurers, our advisors provide comprehensive, customized solutions to protect your valuable collections.
Contact: Farzina Coladon