ART FAIR INSURANCE
Last week, The Art Newspaper posted an interesting report that claimed that art is getting harder to insure. According to their source, Richard Northcott, executive director of the art, jewellery and private client division at Heath Lambert Group (London), firms that protect specialist fine art insurers are becoming cautious of insuring a large amount of art kept in one place at the same time, such as in storage warehouses and exhibitions. The article explains why:
“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.”
This is partly owing to 9/11 and Hurricane Katrina in 2005, which made insurers aware that a single catastrophe could wipe out an entire art fair or storage facility, and partly owing to recent developments in software that have made it much easier for re-insurers and specialist fine art insurers to track the location of the thousands of policies they have underwritten at any one time.
“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”.