Miami Herald: Insurers learn the art of the deal

Dec 4, 2009

The Miami Herald published this article on December 4, 2009.



Art fairs like Basel as well as similar events around the world are prime opportunities for insurers that specialize in covering fine art to rub shoulders with clients, court prospective ones, and maybe catch a glimpse of some of the artwork they cover.

Travelers has been a sponsor of the Pulse Miami Contemporary Art Fair, being held at the Ice Palace in Miami through Sunday, for four years. A contingent from Chartis’ fine art insurance group is here this week and Katja Zigerlig, who heads the group, attends all the premier art shows and fairs.

“There’s great opportunity in Miami. It’s one of the places where people take the pulse of the market,” says Andrew Gristina, director of fine art insurance at Travelers, who is here for the fair with Rebecca Glenn, Travelers’ underwriting vice president for this division.

Gristina says he has had clients coming to Art Basel since the fair started in 2002.

Insuring fine art “is a much bigger market than it was 20 years ago. Not just because values are higher, but because there’s more awareness of fine art, there are more collectors, more museums,” says Mike Roney, a vice president at Fireman’s Fund.

Collectors just can’t add coverage for their art or antique pieces to their homeowners policies nor can dealers expect to cover works they exhibit with their commercial property insurance. Specialized coverage is required.


Insuring art — whether it be paintings, sculpture, antiques, jewelry, antiquities or other rare items such as coins and stamps — is a niche business in the insurance world. Only a handful of companies go after this market, including Travelers, Lloyds of London, Chubb, Fireman’s Fund, which is a unit of Allianz SE, the world’s largest property insurer, and Chartis, which includes the personal, commercial and foreign insurance units of AIG.

The insurance contracts for fine art aren’t standard. Most often they’re negotiated by the insurer and the collector or gallery. Because works of art aren’t items that can be easily replaced, if at all, coverage is based on the appraised value of the art — usually a recent appraisal. That’s the amount an insurer will pay out if an artwork is damaged, lost or stolen. Insurers can cover an individual piece or provide a blanket policy of, say, $5 million to collectors, gallery owners or exhibitors.

An insurer won’t pay more than the agreed value even if the market value has increased, says James Jenson, a restoration specialist and insurance agent who runs, a website that provides information on covering art, antiques and crafts.


Gallery owners or exhibitors such as Helen Allen, the director of the Pulse fair, usually buy coverage to handle fire, theft and liability. All 89 exhibitors at the fair this year also have individual coverage. Insurers say there is plenty of capacity to insure art, whether it’s in a private collection, with a dealer or a gallery. Rates are stable. However, rates could be higher if a collector needs extra coverage to deal with earthquakes or hurricanes.

Fine art insurance isn’t required, like auto or homeowners coverage. “But like dental or healthcare coverage, you want to buy it in advance to know you’re covered,” says Zigerlig. Chartis provides coverage for artwork valued at about $1 billion.

While millions of dollars of art collected in one place like the art fairs in Miami this week could give insurers sleepless nights, that’s not where insurance companies face their biggest losses.

Zigerlig at Chartis’ private client group, says most of the losses occur in handling and transporting artworks.

Insurers feel much better when the art pieces they cover are in experienced hands. That’s where Elizabeth Stevens comes in. She runs an art shipping company in New York and transported many of the works that are being exhibited at Pulse Miami.

Stevens says she won’t transport any piece that her company hasn’t packed because “I don’t know what condition it’s in.”


Collectors may be able to reduce their insurance costs by having all or some of their artwork stored in high security facilities such as The Fortress or Museo Vault in Miami or RoboVault in Fort Lauderdale.

Gristina says sponsoring Pulse Miami and its sister fair in New York provides a venue to meet gallery owners and exhibitors who tend to be the company’s clients.

The fairs present a branding opportunity for the insurer. At the Affordable Art Fair in Manhattan, also sponsored by Travelers, the insurer runs a packing station so buyers can ship their new artwork home, wrapped and sealed with packing tape emblazoned with the Traveler’s signature red umbrella logo.

At Pulse Miami this week, the Travelers’ red umbrella may pop up, Gristina says. If sunny skies give way to rain, “we’ve provided red umbrellas to escort people from the curb to the door of the Ice Palace.”