With the consistent growth of activity and values in the art and collectibles markets, rise in catastrophic events, and changes and restrictions in the insurance industry, collectors are navigating a complex landscape with regards to protecting their collections. The evolving exposures warrant a vigilant and strategic approach to mitigating physical and financial risks for valuable assets.
Natural Catastrophes
The increasing frequency and severity of natural disasters presents complicated challenges for safeguarding and insuring collectibles. During the 2024 Hurricane Season alone, there were five major Named Storms that made landfall reportedly causing over $180 billion of damage combined [1]. Wildfire remains a threat; the increase in occurrence and speed at which they spread in the last decade combined with the high probability of total losses for art and other property, have necessitated changes to capacity, appetite, and costs in the insurance market for coverage in wildfire prone areas. The broader effects of climate change, temperature extremes, erratic weather patterns and rising sea levels, mean natural disasters will remain a pronounced (and constant) risk.
Two fundamental steps to help mitigate losses, both physical and financial, to collectibles from catastrophes are 1) ensure collections are insured, 2) implement a specific and actionable emergency plan.
You should consider consulting with a risk advisor and collections specialist, such as conservators and art handlers, to assess and abate vulnerabilities, establish secure storage options and confirm who to contact after a disaster for damage control. Â In the event of a loss, streamline recovery efforts by keeping documentation tools on hand, such as a camera, chargers, notepads, flashlights and archival or non-reactive gloves to move art to a safe area. Maintaining current valuations and updating your insurance accordingly are also an essential component to these risk management efforts.
Artwork Maintenance, Handling and Storage
Transit Related Risks
Transportation remains one of the most frequent causes of damage to artwork [1]. Even with careful packing and handling, vibrations, humidity fluctuations, human error and accidents during transit pose threats. Risk of loss increases for longer and international shipments and when there are multiple stops and parties involved. To help reduce the possibility of loss as well as help expedite resolution in the event of damage during transit, consider the following:
- Choose Specialized Transport and Handling Companies: Select vetted and reputable logistics providers specializing in fine art transportation. These companies employ experienced and professional trained handlers. Ask whether the trucks have two handlers, remain attended, and feature GPS, alarms, air-ride suspension, and climate controls. The shipment quote should also include unpacking, installation, and disposal of packing materials.
- Ensure Proper Packing for Safe Transit: Work with professional handlers to securely pack artwork specific to value, size, medium, framing, age, condition, and travel distance. Soft packs, slipcases or shadow boxes may be sufficient for lower-value or short transits, while travel frames or custom crates are often warranted for high-value or long transits. Packing materials should never touch an artwork’s surface. For new acquisitions, confirm packing responsibilities with the seller or shipping company, and for loans, review packing and shipping plans with the borrowing institution.
- Document Condition Before and After Transit: Maintain detailed condition reports with images for each work. Reports should be completed prior to pick-up and cross-referenced upon arrival to identify any discrepancies or concerns. Furthermore, this encourages accountability and provides evidence in case of damage or disputes.
Storage and Maintenance Practices
Proper storage is essential for long-term preservation as well as temporary safeguarding in response to an impending catastrophic event. When selecting an art storage facility, consider the following:
- Climate-Controlled, Secure Facilities: Store artwork in reputable, vetted facilities that maintain stable temperature and humidity levels, central station fire and burglar alarms, controlled access, backup generators, and interior and exterior surveillance.
- Regular Inspections & Condition Reports: Conduct condition checks on a regular basis and complete a condition report before artwork is moved into storage. Conservators can help identify signs of forthcoming issues, such as varnish deterioration or paint de-stabilization. Regular inspections are especially important for outdoor sculptures or temperature-sensitive works.
- Stable Home Environment: Try to fluctuate in temperature and humidity within the home and install works away from direct sunlight, heat sources and vents. Engage professional art handlers to properly and securely install and display collectibles. Maintain central station fire and burglar alarms and consider individual contact-alarms for high valued works.
Risk Management and Insurance for Collections
Valuable Articles insurance plays an important role for risk management of a collection. Coverage should be placed based on the specific exposures of a particular collection, and policies should be reviewed annually to address factors, such as:
- Coverage, Limits and Updated Valuations: A Valuable Articles policy provides protection for physical loss or damage subject to a policy’s exclusions; take care to understand exclusions such as, but not limited to, inherent vice or wear and tear. Pay close attention to the valuation clauses and how a claim would be adjusted.
- Documentation: Make copies of invoices, appraisals, and provenance and authenticity records; this information can help with terms and rates when finding coverage, can help streamline settlement of a claim, and deter or resolve title disputes.
- Special Sub Limits and Deductibles: An insurer may limit coverage for collections in high-catastrophe prone areas by implementing a sub limit at those locations and/or adding a catastrophe-specific deductible.
As the losses from natural catastrophes continue to rise year of year [1], insurers are having to closely monitor their aggregations, reduce their capacity, increase rates, or even decline to write business in certain geographies. Working with brokers specializing in high-value collections can help navigate
Conclusion
Collectors are facing evolving challenges to protect their collections. From climate-related threats to vulnerabilities during transport and storage, building a risk management infrastructure around a collection takes careful consideration and strategic mitigation. Implementing proactive sound practices in handling and care, valuations, and insurance, in collaboration with experienced professionals, can help safeguard these valuable assets physically and financially and preserve the integrity and legacy of a collection.
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