Art Insurance:

For the art and your museum

What is art gallery insurance?

Leonardo Da Vinci took four years to paint The Mona Lisa. Can you imagine how much time it took to steal the renowned work of art? According to History, in 1911, the infamous Italian thief Vincenzo Peruggia stole the Mona Lisa within a few hours. The famous painting was found and returned two years later. This is what art gallery insurance is for.

The INTERPOL has a database of more than 50,000 stolen works of art. Among other risks, theft is one of the most significant risks art museums and galleries face. This type of threat can be covered by crime insurance.

So, art gallery insurance covers your art gallery, your art collection, and everything inside your gallery premises. If you think your gallery business is risk-free, here are a few vulnerabilities you need to consider:

Hammer damage:

The artist you had only dreamed of speaking to has agreed to put their artwork in your gallery. However, the artist has some strict guidelines for the décor for the exhibit. You delegate the tasks at hand to your employees, and soon after, you hear a loud crack. Instead of hammering in the nail, one of the employees has hammered his own fingernail. What do you do?

Splatter disaster:

It’s the opening of a new artist’s exhibition. The people seem to be enjoying the line of tea and other drinks along with the art. Everything looks perfect until you notice a person tripping on his shoelaces and spilling his drink on an artwork. So, how do you manage this situation?

Transit tension:

You’ve confirmed a new batch of artwork and you’re excited to see it arrive. To your dismay, you get a call from the courier to inform you that an accident has happened. Furthermore, the accident has damaged some of the artwork in transit. Whom do you call?

Here’s what you can do before you get your insurance quote.

Consider these policies for your art gallery insurance:

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Business Owners Policy:

Business owners policy (BOP) is a comprehensive package of the following policies:

Commercial property: It provides coverage for business property and equipment breakdowns.
Commercial general liability: It covers personal and third-party bodily injury and property damage.
Business interruption insurance: It includes lost business income due to damage to the business property.

From art connoisseurs to handymen, art galleries have a lot of visitors. So, your gallery will need BOP insurance to take care of such risks and liabilities.

Workers' Compensation Insurance:

Workers’ compensation insurance insures the employees any injury or accidents that occur on-the-job. The insurance package replaces lost income to the employees and covers their treatment charges.

Working at an art gallery might involve getting creative with the available space for exhibitions. From painting the gallery to setting up sculptures and installations, employees of your gallery are vulnerable to risks and dangers. As a result, in such situations, you require a workers’ compensation policy.

Commercial Auto Insurance:

In case of an auto accident, commercial auto insurance covers third-party claims on bodily injury or property damage.

Whether you travel to see potential artwork or to meet potential artists, and buyers, accidents are bound to happen. This policy protects you and your company in the event of an accident.

Commercial Property Insurance:

Commercial property insurance provides coverage to business-owned properties for any disasters that don’t occur by nature. The policy covers common perils such as:

Vandalism
Fire
Explosions
Smoke Damage

Commercial property insurance covers damages artwork due to these perils with fine art insurance. With expensive lighting and interior decor, exhibitions need a lot of money, time, and energy investment. In addition, the insurance will help you to restore your gallery in the event of such perils.

An art gallery in Florida caught on fire in 2019. The gallery was burnt to the ground reported NBC2 but no artwork was present in the gallery at that time. In such cases, commercial property insurance would cover the cost of renovations.

Commercial General Liability (CGL) Insurance:

General liability insurance covers third-party damages and claims that occur within the premises or due to the operation of the business. The policy provides coverage for:

Bodily injury
Property damage
Personal and advertising injury
Medical payments
Defense against legal actions

Besides the above inclusions, CGL insurance can also include the artwork they showcase but do not own. In the event of a fire, the policy can cover the cost of replacement, compensation, or restoration for damaged artwork.

A painting conservator claimed that the average cost to restore a small painting can vary from $800 to $1000. On the other hand, larger paintings can vary from $10,000 to $15,000 as quoted by artbusinessnews.

CGL insurance excludes claims from errors and negligence of the professionals. So, you may want to purchase professional liability insurance. This also includes errors and omissions insurance and D&O insurance to add to your museum insurance coverage.

Employment Practices Liability (EPLI) Insurance:

Employment practices liability insurance provides coverage for any claims against the business for illegal practices. It covers claims such as discrimination, sexual harassment, and unjust termination.

If your employee sues you for any of the above reasons, EPLI will cover the charges.

Cyber Liability Insurance:

A cyber liability insurance policy protects your business from losses caused by cyber-attacks. The policy covers vulnerabilities, losses, and damages caused by data breaches and malicious hacking.

For instance, according to CNBC, the fastest growing crime is cybercrime. The estimated cost of the liability will be $6 trillion by 2021. The payment information of your clients to the dealers on your gallery’s computer is susceptible to cyber-attacks. Subsequently, hackers may be tracking your transactions right now. So, cyber liability insurance may be your best bet against getting hacked!

Inland Marine Insurance:

Inland marine insurance is a property insurance policy that provides coverage for property in transit. The policy covers risks that commercial property insurance excludes for art insurance.

Cargo is a risky business, and when it comes to art in transit, it could get pretty messy. In 1998, The New York Times reported that a Swissair jet crashed in the water. The crash lost currency, diamonds, and jewelry that was on board along with a Pablo Picasso painting.

Artwork insurance can help protect the art you exhibit while it’s on the road with inland marine insurance. However, a comprehensive commercial cargo policy insures all types of transit: land, air, and sea.

Business Interruption Insurance:

While commercial property insurance provides coverage to business-owned properties for a list of disasters, they do not consider the loss of income to the business. For that, business owners can get business interruption insurance for the loss of income after such disasters interrupt their work.

A Bloomberg article shares the findings of a research done by Magnus Resch, an art advisor. The research found that 55% of the galleries make less than $200,000 per year while 30% were in loss. Since art galleries are susceptible to risks such as fire and explosions, you may lose out on some revenue after such disasters. In such cases, business income insurance will cover the loss of income of your gallery.