From the 1911 theft of Mona Lisa to the 1990 Gardner museum theft of 13 old master masterpieces, art theft continues to pose a major threat to our cultural heritage. Museums have always been guarding their treasures, though not always with success. Private collectors have also been targeted; the 2011 disappearance of a Renoir from its Houston private residence, is unfortunately only one example.
Given the relative ease of stealing a painting and the often large value attached to it, it is wise to be pro-active and examine unwelcome scenarios in detail if you own fine art. Obtaining proper insurance seems the obvious thing to do. But keep in mind that insuring fine art involves a host of complexities that standard home insurance policies may not cover. Here are a few things to consider:
1. The valuation process is critical in determining the correct amount of coverage you need. Non-specialist insurers will often lack basic knowledge of the art market and will therefore tend to undervalue the insured items. With informed, specialist insurers you are more likely to get the coverage you need.
2. With frequent and often significant market changes, it is essential that you subject your collection to regular revaluation and that this is reflected in the insurance policy.
3. Specialist insurers will usually provide you with the option of automatic coverage of newly acquired works of art before notifying the insurer. This is important given that the time of purchase and transport is high-risk for theft or damage.
4. The consideration of getting a defective title coverage is also a term you may want to discuss with a specialist insurer. This will essentially reimburse you for the cost of purchasing an artwork if it transpires that it has been stolen.
The risk taken by museums and collectors that are not covered against theft is staggering and hard to justify. On the other hand, it is true that insuring art against theft can be quite costly. So how can one mitigate the risk and keep insurance costs at affordable levels? A good solution is to insure for incidents of art theft instead of specific works of art. Rarely is an entire collection stolen; usually a few works are targeted. So you do not necessarily have to insure for the value of the entire collection; you can instead get insured up to an agreed amount (which can reflect part of the collection's value). This way you'll get covered, at least partly, no matter what gets stolen.
Phoebe Kouvelas is an attorney-at-law specializing in art law, offering legal advice on issues related to the acquisition, retention, lending and disposition of fine art.
If you need guidance in any of these aspects, do not hesitate to get in touch.