Art Insurance Restrictions

Gallery owners and art dealers have been warned.

A combination of new software and raised awareness of the potential for large-scale destruction caused by natural disasters, such as hurricanes, and terrorists attacks has led insurers to put a cap on their maximum aggregated value. This means that it will be more of a challenge to insure art collections that are displayed or stored in a singe location at any given time, including long-term storage facilities and at temporary events such as art fairs.

The Art Newspaper reported the warning in their Frieze Daily Edition, which was issued by an executive director for the Heath Lambert Group in London, Richard Northcott.

Northcott made the following statements on the issue:

For a long time nobody in the insurance world was monitoring the cumulative value of art shown at fairs or kept in storage,” explains Northcott. “But in the last two or three years the industry has become a lot more sophisticated and a lot more aware of the issue.

There is a limit to the insurance market’s capacity for the cumulative value of policies for a single event like an art fair,” says Northcott. This stands at around $2bn; the insurance value of art at Frieze this year is much lower as the downturn in the contemporary market has led to declining prices, and the many younger galleries exhibiting for the first time are offering less expensive, emerging artists. But he believes that as the art market recovers, “all major art fairs will come under scrutiny by the industry.

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