Creating art can be an intense emotional journey that transcends any monetary value other people may attach to the work. For many artists, their artwork is more than just an object to sell or display; it’s a tangible example of their creativity and a testament to their journey. Yet, while its emotional worth may be immeasurable, its material value demands protection in the real world. This is where art insurance comes into play.
Art insurance is a unique type of coverage designed to cater specifically to the needs of artists in safeguarding their artistic creations. Art insurance is a broad term that covers a range of potential risks that extends the umbrella of coverage received from standard insurance.
Artistic creation often involves long hours, dedicated effort, and the use of valuable materials and tools. Your studio houses your finished works, work-in-progress pieces, raw materials, specialized tools, and perhaps even digital files and designs. A comprehensive art insurance policy can cover all these elements, offering a blanket of protection over your creative space.
Consider this scenario: Imagine your new sculpture is being shown at a prestigious art fair through a prominent art gallery, and something unimaginable occurs: a visitor walks up to your work and accidentally knocks it to the ground. This event actually took place at a Miami art fair, where a $42,000 sculpture from Jeff Koons’ “Balloon Dog” series was knocked over, breaking into pieces.
As expected, the gallery had art insurance just in case something like this happened, so the artist and gallery were compensated for the loss. The person who accidentally broke the piece did not have to pay for her mistake.
In more drastic cases, such as a flood or hurricane, you may lose many of your completed artworks, which may carry significant market value. Your specialized tools may be irreversibly damaged, from paints and brushes to high-tech equipment. Besides the immediate material losses, your ability to create new work would be severely impacted, which would lead to a significant loss of income during the recovery period.
In these devastating situations, art insurance can offer a lifeline, enabling you to weather the storm without enduring crippling financial losses. Plus, knowing you have this lifeline can help your peace of mind. You can confidently display your work in galleries or public spaces, transport your art to exhibitions or buyers, and even open your studio to visitors, all with the assurance that your art insurance has your back.
Insuring your art and equipment should be fundamental to any artist in the same way that incorporating your art business is essential to protect your assets should you get sued. Art insurance is not a mere luxury but an essential tool, providing an invaluable layer of financial protection for visual artists, securing their creative output against a host of potential risks. While the emotional essence of your artwork remains priceless and unique, art insurance ensures that its material worth is equally respected and protected.
Decoding the Types of Insurance
Now that we’ve established the necessity of insurance let’s delve into the types of insurance that artists might require. The diversity of insurance options available can seem intimidating at first. However, it’s worth noting that not all types may be relevant to you. Here, we break down the different kinds of policies you might encounter in your quest for optimal insurance coverage.
General Liability Insurance
General liability insurance, often termed Commercial General Liability (CGL) insurance, offers coverage for common business risks. It includes bodily injuries, property damage, personal and advertising injury, and legal defense and judgments. As an artist, this type of insurance policy protects you from third-party claims that may arise out of your business operations.
Professional Liability Insurance
Also known as Errors and Omissions (E&O) insurance, this covers you against negligence claims due to harm that results from your professional services or advice. It is especially pertinent for artists involved in service provision, such as photographers or art consultants.
Property Insurance
Property insurance safeguards your business’s physical assets – the equipment, tools, and premises you rely on to create your art. This insurance can cover damages from various perils, including fire, theft, or natural disasters. It’s worth noting that while property insurance can provide coverage for the physical tools of your art business, it does not necessarily cover the artwork itself.
Artwork Insurance
Often an extension or standalone policy, artwork insurance provides specific coverage for your art pieces. Artwork insurance can cover a broad range of risks your creations may encounter, including theft, vandalism, accidental damage, and natural disasters. This insurance type is particularly relevant if you have a substantial inventory of artworks you create, display, or sell.
While it’s tempting to gloss over the subject of insurance (it can be a dull topic for creative types), it plays a vital role for anyone wanting to build an art business. Pursuing your passion shouldn’t come at the risk of financial ruin.
Choosing the Right Art Insurance: Factors to Consider
Prot4ecting your art business isn’t just about choosing a policy; it’s about selecting the right one that matches your specific needs and circumstances. Below, we dissect the significant factors artists should consider when selecting an insurance policy.
Understanding Your Unique Needs
Your needs as an artist are unique. They will differ from those of an art collector, a gallery, or an art dealer. Consider the nature of your art, the materials you use, the size of your works, and how and where you create. A sculptor working with metal might have different insurance needs from a watercolor artist or a digital artist. Your art insurance should reflect these individual needs.
Extent of Coverage
Art insurance policies differ in terms of coverage. Some policies offer “all-risk” coverage, which means they protect against all risks of physical loss or damage from any external cause, barring those specifically excluded. Others may provide “named-perils” coverage, protecting against only the dangers listed in the policy. These could include fire, theft, accidental damage, and natural disasters. In many cases, all-risk coverage is preferable for its broad protection.
Geographical Scope
As an artist, your work may travel. Your insurance policy should provide worldwide coverage, whether shipping to exhibitions, buyers, galleries, or working in different locations. This ensures your work is protected no matter where it is. Some policies might restrict their coverage to certain geographical areas, so this is an essential factor to consider.
Valuation Clause
The valuation clause of an art insurance policy determines how the value of lost, stolen, or damaged artwork is calculated. It could be based on the work’s market value, agreed value, or another measure. The most appropriate valuation clause for you depends on the art market you participate in, the nature of your work, your sales history, and your individual circumstances.
Exclusions
Every insurance policy has exclusions or scenarios where coverage does not apply. For example, some policies might not cover damage resulting from poor workmanship or inherent vice. Others might exclude coverage for artworks in transit or artworks stored in specific locations. Carefully review the exclusions of any policy you’re considering to ensure they don’t leave you unprotected in situations you’re likely to encounter.
Deductible
The deductible is the amount you’re required to pay out of pocket before your insurance coverage kicks in when you make a claim. Policies with higher deductibles generally have lower premiums, but this also means you’ll pay more when a loss occurs. Consider your financial situation and risk tolerance when choosing a deductible.
Claim Settlement
The claim settlement process of an insurance company should not be overlooked. After a disaster, the last thing you want is a process that leaves you waiting for your settlement money. Look for insurers known for their fair, prompt, and hassle-free claim settlements. You can often find information about this by reading customer reviews or talking to other artists who have had to make claims.
Expertise in Art Insurance
Lastly, you want an insurer who understands art. They should be familiar with art creation, the exhibition process, sales practices, shipping, and other nuances specific to artists. Such an insurer will be better equipped to meet your unique needs.
Special Considerations for “Business-Related” Structures and Activities
Suppose your studio or workspace is within your home, like a basement, bedroom, garage, or detached building and you have homeowners or renters insurance that covers your property.
Unfortunately, an insurance company will consider the physical space used for creating the art and the place where you store your art as “business-related” and, therefore, may not be covered by your regular homeowners or rental policy.
The misperception that homeowner’s insurance would cover the contents of art studios created severe hardships for many artists who lost their homes and studios in the Gatlinburg, Tennessee, wildfires in 2016. Two teenage boys dropping lit matches on the popular Chimney Tops Trail started a fire exacerbated by strong winds, spreading to encompass over 15 miles of land. Fourteen people were killed and 200 injured, with over 2000 buildings destroyed, including many homes/studios of artists associated with the nearby Arrowmont Art School. Unfortunately, many artists lost their inventory of artwork and equipment, only to find that their homeowner’s policies did not cover the items.
Art insurance, like the Artist and Craft Insurance Policy offered by Zinc, includes both a commercial general liability policy and a business owners policy, or BOP, extending the coverage of your homeowner’s policy. The Zinc policy protects your art studio against losses of your physical business assets, such as your inventory or furnishings. It can also protect intangible assets, such as specialized computer software.
Seth Zaremba, founder, and president of Zinc Insurance, weighed in on the necessary basic coverage for artists whose work is not already covered by a third party’s insurance plan. “Artists should have an Inland marine policy that covers the value of their works, equipment, and supplies wherever they are located,” Zaremba explains. “Policies can be built to fit the per-item value as well as the total value of their work, equipment, and supplies.”
Liability may also not be covered on your homeowner or renter’s policy. Art insurance policies like Zinc’s can also pay for injuries at your studio’s premises. If a collector visits your studio and is accidentally hurt and they sue you, you are covered. Product liability is also covered, which pays for damages that occur because of something intrinsic to your art that ends up hurting someone. For example, you create a sculpture with sharp edges, and your customer severely cuts themselves, requiring an emergency room visit to the hospital. If they sue you for damages, you’re covered.
Protecting your Art During Shipping
Transporting artwork to buyers, art fairs, galleries, or other events is intrinsic to many art businesses. Unfortunately, many shippers, such as UPS, offer insurance for transported items, but it usually includes only a small amount of insurance, like $400. You can buy additional insurance, but that is also typically limited. For example, Fed Ex limits the maximum coverage for artwork to $1000.
Another issue is that UPS, Fed Ex, DHL, and large shippers won’t always pay the declared value but the repair, depreciated, or replacement costs, whichever is less.
Here is a real word example. Several years ago, I used Fed Ex to ship a small, 3D lightbox art piece. The work was being sent to an art fair, where it would be on sale for $1000. I paid extra for a $1000 declared value. The gallery received the piece, but Fed Ex had damaged the work beyond repair. I filed a claim with Fed Ex to receive the declared value of $1000. However, because this was the first piece of a new series, I had no proof of the $1000 value, such as the sales history. The work was intended to sell at that price, but there is no proof that anyone would actually pay that value. As a result, Fed Ex would only reimburse me for the cost of the materials used to create the work.
In retrospect, I should have used a shipper that specializes in transporting artwork. These companies not only handle all aspects of shipping, coordinating retrieval, wrapping, packing, crating, ground or air transport, delivery, and unpacking as needed, but they would also provide adequate insurance coverage regardless of the lack of sales history. They will also have policies that cover prices beyond the limits of Fed Ex and other traditional shippers.
There are numerous national and international art shippers. However, they could be too expensive for lower-value artworks. Instead, work with lower-cost regional shippers. If shipping your artwork is something that is a regular occurrence, you can get an art shipping policy through an insurance company like Chubb or Travelers.
The Process of Insuring Your Art: Steps to Follow
The process of insuring your art and art business may seem daunting, but approaching it systematically, by following a series of steps can help you can navigate this process with confidence and assurance.
Step 1: Inventory Your Artwork and Equipment
An essential step in insuring your art involves meticulously cataloging and documenting your creations. Note the title, creation date, dimensions, materials used, and other relevant details for every piece. Photographic documentation of your artwork is equally important. High-resolution images from various angles will provide a visual record that could prove invaluable in case of damage or loss.
Put together a list of all the non-disposable contents of your studio or workspace, such as furniture, paintbrushes, easels, cameras, and any other tools of the trade. Include receipts if they are available. If you don’t have receipts, take screenshots of the items online that show the purchase price. Make sure you have a photo of the items in your studio as proof that you actually owned the item.
Step 2: Appraise Your Artwork
Once you’ve compiled a detailed inventory, the next step is professionally appraising your artwork. An appraisal determines the market value of your artwork, which is the basis for your insurance coverage. Engage a certified art appraiser who understands your art genre and market. Alternatively, if the items in your art inventory are similar to ones that have been sold, you can use the sales history as proof of value.
Remember, art appraisals should be updated periodically to account for fluctuations in the art market. Consider the scenario of an artist whose work has gained significant recognition over a few years, leading to a surge in the market value of their artwork. Regular appraisals ensure that the insurance coverage reflects this increased value, providing adequate protection.
Step 3: Identify Your Specific Needs
Art insurance is not one-size-fits-all. Your needs as a painter might significantly differ from those of a sculptor or installation artist. Identify your specific requirements in terms of coverage. Consider factors like the physical vulnerability of your work, storage, and transportation needs, exhibition risks, and potential liabilities.
Step 4: Research Potential Policies and Providers
Armed with knowledge about your needs and your artwork’s value, you can begin researching potential insurance policies and providers. Look for companies with a strong track record in art insurance, positive customer reviews, and an understanding of the art world. Compare policies in terms of coverage scope, exclusions, premiums, deductibles, and claim process.
Step 5: Consult with an Insurance Agent or Broker
Consulting with an insurance agent or broker specializing in art insurance can be incredibly beneficial. These professionals can help clarify any doubts, guide you toward the best policies for your needs, and assist you in understanding the fine print.
Step 6: Purchase Your Policy
Once you’ve found a policy that suits your needs and budget, it’s time to make the purchase. Read the policy document carefully before signing, ensuring you understand all terms and conditions.
Step 7: Regular Review and Update of Your Policy
After purchasing your policy, your job is not done. Regularly review and update your insurance as your circumstances change. If you create new works, get them appraised and added to your policy. If your work appreciates in value, update your coverage accordingly.
Add a yearly review to your calendar so that you don’t forget. Insurance is meant to ensure you are covered in case of a disaster so the last thing you want is to find out that there were things missing from your policy after the disaster strikes.
Embrace the Power of Art Insurance
Art insurance is more than just a financial safety net for artists; it’s a tool that enables you to create fearlessly, secure in the knowledge that your creations are protected. As a visual artist, you pour your heart and soul into your work, which deserves to be safeguarded with the same passion.
Navigating the art insurance world may seem complex, but it can become a manageable and worthwhile task with the right knowledge and resources. As you delve into the realms of creativity, let art insurance be your steadfast companion, protecting your artistic journey every step of the way.
Remember, each artwork you create is a testament to your talent, dedication, and unique creative vision. So embrace art insurance because your art is not just valuable; it’s priceless.
Great article Steve – who are the major providers of the insurance above? Are there any firms that specialize in insurance for the small art studio? Thank you.