Chubb Offers Tips for Collectors before Lending Art

September 1, 2004

Prompted by the recent theft of two famous paintings by Edvard Munch from a museum in Oslo (See IJ Website Aug. 23,24), the Chubb Group of Insurance Companies has issued a bulletin advising would-be lenders of artistic works to take certain precautions before doing so.

“Many private collectors lend their art because it can increase the value of the object,” stated Dorit Straus, Chubb’s worldwide fine arts manager. “However, safety standards vary by museum and country, and overseas loans can be particularly complicated because of additional transit, customs regulations and foreign laws.”

Chubb is a leading insurer of valuable articles such as art, antiques and jewelry. It set out the following points and questions collectors should ask in order to protect themselves against potential losses when lending works of art overseas:
— Is the work of art stable to withstand travel? While the curator may want the work of art because it is important to the context of a show, the museum conservator is key in determining the stability of the piece to travel. Ask the conservator to provide a fully detailed condition report before the work has left your possession. How will your work of art be displayed? Ask about security cases, security screws, location of the objects in relationship to visitor flow, and distance from the viewing public.
— Will the museum travel the exhibition, including your work, to other facilities? If so, obtain the same security-related details for every location where your work would be displayed.
— Ask the museum for a facility report and for information about its security systems and procedures.
— Obtain specific information about the museum’s insurance policy. This is especially important overseas, where many state-owned museums, such as the one housing the Munch paintings in Oslo, do not purchase insurance covering theft and other perils. Is the coverage wall-to-wall and would it respond to terrorism-related losses? Which company underwrote the insurance policy, and what is its financial security? Has the museum not addressed certain recommendations made by the insurer, and if so, what impact may that have on coverage if there is a loss?

Chubb also said would-be lenders should determine whether the exhibition is insured through the U.S. Indemnity program. It explained that the “program authorizes the Federal Council on the Arts and the Humanities to make indemnity agreements with individuals, non-profit, tax-exempt organizations and governmental units for eligible objects from other countries while on exhibition in the United States.” Lenders should ask for detailed information about the requirements of the program.

They should also:
— Obtain details on the labeling and identification of your artwork. In addition, make sure that there are no issues about the title or authenticity of your work.
— Notify your insurance company, agent, broker prior to lending. Ask their advice prior to waiving any rights of subrogation against the museum, packer or shipper.
— Ask about the packing and shipping of your piece from your home to the museum. Will the museum use storage facilities while consolidating the shipments? Obtain full details about fire and burglar protection for the storage location.
— Make sure that the loan agreement that you receive from the museum specifies all the requirements that you had negotiated when you agreed to loan your work.

Was this article valuable?

Here are more articles you may enjoy.