ART INSURANCE

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Content Overview of Insurance Introduction to Art Insurance Valuation of Art Procedure for claiming insurance policy Type of art & insurance companies covering with the art insurance Various arts insured (worldwide- images) Art insurance in India 10 steps to know about the art insurance. Future of art insurance Survey Case study on insurance company providing Art insurance Conclusion Biblography

Page No. 2-12 13-17 18-26 27-30 31-32 33-36 37 38-41 42-43 44-48 49-52 54 55

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Art is a technique of communicationand the image is the most complete technique of all communication.

INTRODUCTION: Insurance is an arrangement where the losses experienced by a few are extended over several who are exposed to similar risks. Insurance is a

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protection against financial loss arising on the happening of an unexpected event. Insurance companies collect premium to provide security for the purpose. As loss is paid out of the premium collected from the insuring public and the insurance companies act as trustees to the amount so collected.

Insurance is a tool by which fatalities of a small number are compensated out of funds (premium payment) collected from plenteous. Insurance companies pay back for financial losses arising out of occurrence of insured events, e.g. in personal accident policy death due to accident, in fire policy the insured events are fire and other allied perils like riot and strike, explosion, etc. Hence, insurance is safeguard against uncertainties. It provides financial recompense for losses suffered due to incident of unanticipated events, insured within policy of insurance. EVOLUTION OF INSURANCE: Marine insurance is the oldest form of insurance followed by life insurance and fire insurance. The history of insurance can be traced back to the early civilization. As civilization progressed, the incidences of losses started increasing giving rise to the concept of loss sharing. The Aryans through their village co-operatives practiced loss of profits insurance. The Mediterranean merchants also practiced it in the 14th century through the issue of Bottomry Bonds. The Code of Manu indicates that there was the practice of marine insurance carried out by the traders in India with those of Srilanka, Egypt and Greece. The earliest transaction of insurance as practiced today can be traced back to the 14th century A.D. in Italy when ships were only being covered.
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This practice of Marine Insurance gradually spread to London and during the 16 th century it was established in the mercantile transactions. The history of Marine Insurance is closely linked with the origin and rise of the Lloyds Ship owners. The Lloyds Act was framed to set-up the Lloyds by whom they were empowered to transact other classes of insurance. Today, Lloyds is regarded as the largest insurance underwriter in the World. MEANING: It is a commonly acknowledged phenomenon that there are countless risks in every sphere of life. For property, there are fire risks; for shipment of goods, there are perils of sea; for human life there are risks of death or disability; and so on. The chances of occurrences of the events causing losses are quite uncertain because these may or may not take place. Therefore, with this view in mind, people facing common risks come together and make their small contributions to the common fund. While it may not be possible to tell in advance, which person will suffer the losses, it is possible to work out how many persons on an average out of the group, may suffer losses. When risk occurs, the loss is made good out of the common fund. In this way, each and every one shares the risk. In fact, they share the loss by payment of premium, which is calculated on the likelihood of loss.

DEFINITION: It is a form of a contract or agreement under which one party agrees to pay in return of consideration an agreed amount of money to

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another party to make good the loss, damage or injury due to some uncertain event in which the insured has interest. NATURE OF INSURANCE: On the basis of the definition of insurance, one can observe its following characteristics: 1. RISK SHARING AND RISK TRANSFER: Insurance is a mechanism adapted to share the financial loses that might occur to an individual or his family on the happening of a specified event.

2.

CO-OPERATIVE DEVICE: Insurance is a cooperative device under which a group of persons who agree to share the financial loss may be brought together voluntarily or though publicity or through solicitations of the agents. An insurer would be unable to compensate all the losses from his own capital. So, by insuring a large number of persons, he is able to pay the amount of loss. Like all co-operative devices, there is no compulsion here on anybody to purchase the insurance policy.

3.

RISK ASSESSMENT IN ADVANCE: Insurance companies are risk bearers. Therefore, the risk is evaluated

before insuring to charge the amount of share of an insured, herein called, consideration, or premium. The probability theory is used to evaluate the risks.
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4.

COMPENSATION AT THE OCCURRENCE OF CONTINGENCY: The compensation is made at a certain contingency insured. If the

contingency occurs, payment is made. Since the life insurance contract is a contract of certainty, because the contingency, the death or the expiry of term, will certainly occur, the payment is certain.

5.

AMOUNT OF PAYMENT: On the occurrence of the contingency, the insurer is legally bound

to make good the financial loss suffered by the insured. The amount of payment depends upon the value of loss occurred due to the particular insured risk provided insurance is there up to that amount. 6. HUGE NUMBER OF INSURED PERSONS: To make the insurance cheaper, it is essential to insure larger number of persons or property because the lesser would be cost of insurance and so, the lower would be premium. 1. INVESTMENT PORTFOLIO: Since insurers collect premiums initially and make payment later when (e.g. the insured persons death) or if (e.g. an automobile accident) an insured event occurs, insurance companies maintain the initial premiums collected in an investment portfolio, which generates a return. Thus, the insurers have two sources of income: the insurance premium and the investment income, which occur over time. FUNDAMENTAL PRINCIPLES OF INSURANCE:

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Insurable Interest
Utmost Good Faith

Principle of Indemnity

Principle of Causa Proxima

Principle of Insurance
Principle of Contribution

Principle of Loss Minimization

Principle of Subrogation

FUNCTIONS OF INSURANCE:

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Insurance provides insurance policies, which are legally binding contracts for which the policy-holder pays insurance premium. Based upon this, the functions of insurance may be discussed as follows: 1. CERTAINTY: Insurance provides certainty of payment for the risk of loss. There are different types of uncertainty in a risk. The risk will occur or not, when will occur, how much loss will be there? In other words, there are uncertainty of happening of time and amount of loss. Insurance removes all these uncertainty and the assured is given certainty of payment of loss. The insurer charges premium for providing the said certainty.

2. PROTECTION: The main function of the insurance is to provide protection against the probable chances of loss. The insurance guarantees the payment of loss and thus protects the assured from sufferings. The insurance cannot check the happening of the event but can compensate for losses arising at the happening of the risk event. 3. RISK SHARING: When risk takes place, the loss is shared by all the persons who are exposed to the risk. The share is obtained from each and every insured in the shape of premium without which the insurer does not guarantee protection.

4. ASSISTS IN CAPITAL FORMATION: The insurance provides capital to the society. The accumulated funds are invested in productive channel. The scarcity of capital of the society is minimized to a greater extent with the help of investment of insurance.
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5. PREVENTION OF LOSS: The insurance companies assist financially to the health organization, fire brigade, educational institutions and other organization, which
Classification of Insurance are engaged in preventing the losses of the masses from death or damage. The
Miscellaneous

insurance joins hands with these institutions in preventing the losses of the society
Life Insurance because Fire Insurance Marine Insurance Social more the reduction in loss causes lesser payment to the assured and so Insurance Insurance

saving is possible which will assist in reducing the premium. Lesser premium invites more business and more business cause Insurance lesser share to the assured. Insurance
Duty Insurance Contractors All Risk Insurance Product Liability Insurance Machinery Loss of Profits Policy Erection All Risks Insurance
Machinery Breakdown Insurance

Motor

Accident

Refrigeration Plant Insurance

Cash Insurance

Business Premises Burglary Insurance

Office Protection Insurance

Personal Package Insurance Policy for Businessmen

Shopkeepers Insurance Policy Rural CLASSIFICATION OF INSURANCE: Insurance

House Holders Insurance Policy

Domestic Travel Insurance

Rajeshwari Mahila Kalyan Bima Yojna

Special Contingency Policy

Art insurance

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Amartya Siksha Yojna Insurance Policy

Engineering Insurance

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Criticism is easy, art is difficult.

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ART INSURANCE INTRODUCTION: Q. What is Art? It is not only expensive paintings; it also includes the fondness and love for:

Sculptures Visual Arts ceramics, murals, works on paper Antiques, Collectibles rare stamps Vintage vehicles It could be an object subject to value appreciation due to age, description, history and rarity.

Insurance of art is based on a valuation that's acceptable to both the insurer as well as the insurance company. As art becomes more and more valuable, art insurance is absolutely essential. Valuation of paintings is based on market feedback and individual collectors can avail of the policy as well. This is a new market and so initially, art insurance is very expensive. But as more and more people are looking at art as an investment, insuring one's collection is definitely in order.

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NEED OF ART INSURANCE:

The Scream "The Scream" and "Madonna," two major paintings by famous Norwegian artist Edvard Munch, were stolen several years ago from the Munch Museum in Norway by armed robbers in broad daylight. The significance of the art theft is notable, but what's really shocking is that the art was not insured against theft (although it was insured for fire and water damage, for restoration costs that would be incurred to repair the paintings if they were damaged). According to a BBC news story, John Oyaas, managing director of the museum's insurers, said of the paintings, "They are not replaceable so you can't buy 'The Scream' on the street and put a copy up there. The focus is on other issues than insuring them. To a certain extent this is common practice because these items aren't replaceable."

Now according to the statement, Mr. Oyass appears to be saying that the paintings are so valuable that they're not worth insuring, or put another way, since the paintings are not replaceable, insuring them is a waste of money. This thinking makes absolutely no sense. The museum should have had theft insurance; all museums should have theft insurance, as should all art galleries and private collections. Whether or not a work of art is "replaceable" is not the issue. The issue is getting compensated if the art is stolen. What's better-- a
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stolen painting and a $5 million insurance settlement or a stolen painting and a $0 insurance settlement?

World over investments in fine arts has grown over by 55% annually. The possession of Fine Arts is a symbol of confidence, wealth, image and status. Besides nowadays increasing terrorist activities are damaging many valuable & antique collections. So for protection against the loss incurring from such activities insurance are required.

Who can buy Art Insurance? Art insurance can be taken for various Vintage & Antique things and it can issued by various parties: Art Lovers Private collectors individuals and corporate. Art Dealers. Art Galleries. Art Fund. Warehousing Service Providers

Q. How to buy art insurance? If you have an insurance broker you like, you might start there, but only if the agent is either willing to deal with specialized insurers or have proper knowledgeable about art. "You dont want to say the name of an artist and have the broker go, Huh?,"
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Q. How much will it cost? It is said that theft insurance is way too expensive. The cost of insuring a museum's entire collection is prohibitive, but thieves don't normally steal the entire collection. They only steal part of it, and usually a pretty small part. So insure only a part of it. Theft insurance covers "incidents," not specific works of art, unless the insured specifies individual coverage for specific works of art in the policy. In other words, if you purchase theft insurance, you're insured for the coverage amount no matter what gets stolen. "But insuring even few most valuable paintings is still too expensive." It is suggested that one can pay as much insurance as he can afford. That way, if art gets stolen, at least one have enough money to hire top quality private investigators to try and recover it, get publicity for the theft, or perhaps even pay a ransom. Or use the money to buy a state-of-the-art security system for their museum (or gallery or private collection) so that theft doesn't happen again. Forget about whether or not art is replaceable or unique or iconic; receiving compensation for a theft is what counts, and using that compensation to either recover the art or make life more difficult for people who steal art, so difficult, hopefully, that many will stop stealing it.

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MONA LISA- The most expensive painting in the world

Art is never finished, only abandoned.

VALUATION OF ART: There are two different programs available to cover Fine Arts. It is important to understand the differences in coverage and what is necessary to secure coverage.
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Following are the two different policies which can be used to cover any Fine Art: 1. Fine Arts (Scheduled) and 2. Species-Fine Arts and Library Collections (Unscheduled). Following explanation describes the difference between these two policies, the coverage available and the procedures for securing coverage and reporting losses. FINE ARTS (Scheduled):

A. GENERAL DESCRIPTION OF FINE ARTS POLICY: It is only to be used as a guideline and is not inclusive of all of the terms, coverages, exclusions, limitations and conditions of the actual insurance policy. Specific questions and discussions regarding coverage should be addressed through Campus Risk Management or the Office of Risk Services.

B. NAMED INSURED: All corporations, partnerships, joint ventures, organizations, and other entities, as have existed or as now or may hereafter exist, or for which it is required to or has agreed to maintain insurance, including any affiliated, associated, allied, and subsidiary entities.

C. TERRITORY: Coverage is provided worldwide, except for the following countries: Israel, Iraq, Iran, Afghanistan, Albania, Bulgaria, Libya, Liberia, Cuba, The

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Czech or Slovak Republics, Hungary, Poland, or any of those territories formerly comprising and known as the Union of the Soviet Socialist Republics and the former country of Yugoslavia. The countries listed above are excluded as a result of the known existence of art theft rings and the high frequency of art theft. D. LIMITS OF INSURANCE: Permanent Collections and Exhibits $50,000,000 at any campus location (per loss) $20,000,000 at any other location or in transit $20,000,000 earthquake aggregate per campus $50,000 sub-limit for film Property of Others Foreign Transportation and Exhibits $5,000,000 any one loss.

F. COVERED PROPERTY: Permanent Collections Works of art, including paintings, etchings, drawings, (including their frames, glasses and shadow boxes), pictures, statuary, rare books, manuscripts, rugs, tapestries, and other bona fide works of art, or rarity, historical value, or artistic merit, including: Property of the Insured. Property of others on extended loan to the Insured for a period of six months or more. Property of others offered as gifts to the Insured or for sale to the Insured and while awaiting formal acceptance by the Trustees. The Insureds interest in residuary gifts and jointly owned property, but only to the extent of the Insureds interest therein at the time of the loss or damage.
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G. COVERED PERILS: Permanent Collections and Exhibits all risks of physical loss or damage from any external cause, except as excluded. Property in Transit all risks of physical loss or damage from any external cause, including Overseas Transit. H. PERILS EXCLUDED: Following are the various exclusions which are not covered under any art insurance policy:

Natural ageing. Gradual deterioration. Inherent defect. Rust/oxidation, moth, vermin, warping, shrinking. Loss during repairing, reframing, restoring, retouching. Aridity, humidity, exposure to light, heat unless caused by fire, storm/ Loss by collusion of partner, director. Inventory loss. At fairs unless notified. War and war like activity. Terrorism

frost etc.

I. VALUATION:

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Property of the Insured shall be valued at the current market value of the property at the time any loss or damage occurs. The loss or damage shall be determined according to such current market value. Property acquired or to be acquired by the insured as a gift or under wills or similar requests shall be valued at the current market value at the time the loss or damage occurs. The policy will not cover such property beyond the companies interest therein and in the event of loss of such property, the interest of the company at the time of the loss shall be that as stipulated in the will, bequest, contract or other document executed between the company and the owner of the said property. Property of others loaned to the insured and which the insured has been instructed to insure, or for which the insured may be liable, shall be valued at amounts agreed upon by the insured and owners. In the absence of an agreement, the insurance policy will not be liable beyond the current market value of the property at the time the loss or damage occurs and in no event for an amount in excess of that specified in the policy. IN THE EVENT OF A LOSS All losses shall be promptly reported to the Campus Risk Management Office and the Office of Risk Services, Office of the President. All incidents involving theft or vandalism should also be reported to the campus and/or local police department. Take reasonable emergency measures to mitigate any further damage.

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SPECIES-FINE ARTS AND LIBRARY COLLECTION A. GENERAL DESCRIPTION OF SPECIES-FINE ARTS AND LIBRARY COLLECTION: This policy provides coverage for unscheduled and miscellaneous items that are not reported under the Fine Arts Insurance Policy described above. The coverage described below is a summary of the insurance policy; however, it is only to be used as a guide and is not inclusive of all of the terms, coverage, exclusions, limitations and conditions of the actual insurance policy. Specific questions and discussions regarding coverage should be addressed through the Office of Risk Services. B. NAMED INSURED: All corporations, partnerships, joint ventures, organizations, and other entities, as have existed or as now or may hereafter exist, or for which it is required to or has agreed to maintain insurance, including any affiliated associated, allied, and subsidiary entities. C. TERRITORY: Coverage is provided worldwide. D. LIMIT OF INSURANCE: This policy provides limits of $1,000,000,000 excess of a $1,000,000 deductible. Claims falling within the $1,000,000 deductible will be covered and subject to the following schedule of deductibles. E. COVERED PROPERTY: All forms of Fine Art of any nature or description and
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Library Collections of any nature or description, including but not limited to: Volumes, serials received currently, personal manuscripts, UC archival manuscripts, other archival materials, maps, microfilm reels, micro cards, microfiche, microprints, pamphlets, government documents, audio discs, audio cassettes, audio reels, compact discs/digital audio, videotapes, videodiscs, multi-media kits, motion pictures, filmstrips, pictorial items, 35 mm slides, computer tapes, monographic CD-ROM discs, serial CD-ROM discs and floppy discs. Covered property includes: 1. Property of the Insured. 2. Property of others on loan to the Insured. 3. Property of others offered as gifts to the Insured or for the sale to the Insured and while awaiting formal acceptance by the Insured. 4. The Insureds interest in residuary gifts and jointly owned property, but only to the extent of the Insureds interest therein at the time of the loss or damage; all of the above being part of, and known as the Insureds Permanent Collection, while on exhibition or otherwise, and while in transit worldwide. 5. Property of the Insured or property of others loaned to the Insured and which the Insured has been instructed to insure, covering said property on a wall to wall basis from the time the said property is removed from its normal repository, incidental to shipment, until returned thereto to or other point designated by the owner or their agent prior to return shipment, including while in transit and while on exhibition or otherwise worldwide.

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F. COVERED PERILS: All risks of physical loss or damage from any external cause, except as excluded.

G. PERILS EXCLUDED Wear and tear, gradual deterioration, moths, vermin, inherent vice, or loss or damage sustained due to or resulting from any repairing, restoration or retouching process. War; invasion; acts of foreign enemies; hostilities (whether war be declared or not); civil war; rebellion; revolution; insurrection; military destruction or damage to property under the order of any government or public or local authority. Shipments by mail unless registered first class mail or parcel post provided, however, such shipments by parcel post shall not exceed the sum of $1,000 (USD) in value. Against loss or damage to property shipped under on deck Bills of Lading. Nuclear reaction or radiation, or radioactive contamination. Earthquake, landslide or subsidence. Note: The Species-Fine Arts and Library Collection insurance does not insure loss caused by Earthquake, which is included under the Fine Arts Insurance Policy.

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H. VALUATION: 1. Property of the Insured shall be

valued up to the current market value of the property at the time any loss or damage occurs in respect of non-scheduled property. 2. Library contents of the insured

shall be valued as per the scheduled limits set forth in the policy. 3. Property acquired or to be acquired

by the Insured as a gift or under will or similar bequest shall be valued at current market value at the time the loss or damage occurs. 4. Property of others loaned to the

insured and which the insured has been instructed to insure, or for which the insured may be liable, shall be valued at amounts agreed upon by the insured and owners. I. IN THE EVENT OF A LOSS: 1. All losses shall be promptly reported to the Campus Risk Management Office and the Office of Risk Services, Office of the President. 2. All incidents involving theft or vandalism should also be reported to the campus and/or local police department.

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3. Take reasonable emergency measures to mitigate any further damage. PROCEDURE FOR CLAIMING INSURANCE POLICY: Along with the increasing portfolio comes the increased possibility of claims. It is very important to arrive at an understanding as to

How to handle these claims, so that the insureds must have some confidence about the company.

Basis of indemnity at inception. This is necessary for the healthy growth of the business.

KINDS OF CLAIMS 1. Total Loss Claims (no great difficulty in settling this). 2. Partial Loss Claims (this needs attention).

FOR

CORRECT

SETTLEMENT

OF

CLAIM

THE

FOLLOWING STEPS ARE REQUIRED:

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1. Reporting of Claim: Claim has to be reported to the nearest claim office. Online, SMS facilities are also available for such. In case of theft & fire, claim intimation should be submitted along with the FIR & Fire Brigade report respectively. In both the general & special cases, claim form has to be duly filled up manually or online. 2. Appointment of surveyor:General surveyor is usually hired for estimating the loss in case of books etc. Specialist surveyors are required for dealing in fine arts because general surveyors have no expertise in quantifying the loss. Internationally, art market experts are employed for assessing these losses. After claim is reported surveyor will go through the policy papers & valuation report, then the assessment of the loss was made. But in cases such as theft, burglary etc investigator is appointed & also the claim is not settled unless & until the final police report is received.

3. Expertise of the Experts:A panel of the best experts available locally who are well respected in India and are consulted routinely by the international Fine Arts Institutions like, The Christies and Sothebys. The experts are used for the purpose of valuation at the time of inception of risk as well. The value that has done the valuation before commencement of risk is usually not appointed as surveyor for assessment of claim amount.

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In case insured not agreeing with the assessment done by the expert, one more expert may be used in consultation with the insured. Experts have their own fee and insured should have a discussion with them to arrive at mutually acceptable fee. In case of partial losses where the insured wishes to surrender the work, artwork can be sold after restoration, in the secondary art market. Essentially the assessment of Fine Arts claim is a negotiation between the insurance company, the expert, and the insured.

PARTIAL LOSS AGREEMENT:In case of partial loss agreement due to perils insured against, the amount of loss shall be the cost and expense of restoration including additional charges insured in connection therewith. The assured and the underwriters should agree upon depreciation, if any, after restoration. In the event if the assured and the underwriters does not agree on the amount of depreciation, property is to be sold at public auction and the net proceed goes to the account of the assured. Underwriters have to pay the assured the difference between the amount so realized and the insured value of the property. In no event shall underwriters be liable for more than the insured value of the property. Besides following are the other points a policy holder has to keep in mind before filing a claim for partial loss:

i)

SPECIAL PROVISION: It is a condition of this insurance that the assured to the best
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of their ability, will provide for the property insured hereunder to be packed, unpacked and shipped by competent and or professional packers and shippers. ii) NO BENEFIT TO BAILEE: It is hereby warranted that this insurance shall in no way insure directly or indirectly to the benefit of any carrier or other bailee. iii) BUY BACK AGREEMENT: In the event of loss hereunder, for which underwriters have made payment, underwriters agree to offer the assured first choice of buying back the recovered property if the property is recovered within two years from the date of settlement. It is agreed that underwriters may request an amount no higher than the amount, which was paid by them when the original claim settlement was made less any deductible, if applicable. iv) COVER: The property described in the attached schedule (the Schedule) is insured against physical loss or physical damage occurring during the period of insurance while at the named location(s) or within the territorial limits specified in the Schedule, subject to the following exclusions, basis of valuation and conditions.

Types of Art Insurance

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There are two types of art insurance coverage that will protect a work of fine art: Title and Property. Title insurance insures against defective title, that the art work was not stolen or looted. Property insurance is similar to homeowner's insuring against theft or damage. Insurance Companies Covering Art Several insurance companies provide coverage for fine art: Chubb Group "Chubb's Masterpiece Valuable Articles policy, valuable items are covered anywhere in the world with no deductible. Whatever possessions you insure, you will have the choice to repair, replace, or keep the cash."

Atlantic Mutual Atlantic Mutual's Valuables Policy provides broad coverage for fine art.

AXA Art "AXA Art is the only globally operating specialty art and collectibles insurance company offering tailor-made coverage solutions for private and corporate collections, museums, galleries and artists."

Tata AIG Private Client Group Tata AIG Private Client Group provides coverage for fine art and rare antiques.

Indian insurance market is experimenting with the niche concept of art insurance. In the last 5 years, the Indian art market has grown more than 500% in sales. Affluents, young entrepreneurs, who choose art as an investment opportunity, and an upward trend of the Indian art-work collectors are the key drivers of growth for art market. Insurance potential lies with art traders with stock value up to Rs 50 crore as it is completely untapped. We feel that only 10-15% of potential in this segment has been tapped yet. We have a comparatively small portfolio, yet a profitable one, says Rajive Kumaraswami, head-risk and re-insurance, ICICI Lombard GIC Ltd. Some estimate that the value of art that can be insured in India totals to about $1 billion. This has an estimated accretion of about 5% per annum.

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At these levels, we estimate the premium potential of the art insurance market to be about Rs 150-Rs 200 crore overall, says Gaurav Garg, MD and chief executive officer, Tata AIG, general insurance.

Art insurance generally covers the risk like damage during transit, restoration and framing. There are risks associated with handling the piece of art within the premises of a gallery which can also be covered. It extends covers to natural perils, accidental damages and terrorism damage. The target customers for the art insurers may be art galleries, art auction houses, art funds, art warehousing service providers and private collectors. Private players like ICICI Lombard, Tata AIG and Bajaj Allianz are the key players in art insurance in India. Profile of the insured, location, security measures and past loss history are some of the underwriting parameters regarding this policy. Art insurance is yet to catch up due to the challenge of valuation which may differ among different valuators. As insurers require the exact price of the asset, it usually becomes difficult to ascertain the sum insured applicable. Also, artworks such as paintings of sculptures require high maintenance in terms of the care taken and security, due to which insurers may be reluctant to take on this risk, says TA Ramalingam, headunderwriting, Bajaj Allianz General Insurance.

VARIOUS ARTS WHICH ARE INSURED:

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LOUVRE- The biggest museum in the world situated in FRANCE

OSLO Museum of Norway

Famous NATURES painting kept in Louvre

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Famous ABSTRACTS made by PICASSO

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The Sad Face- By Picasso

Ship of Fools (painted c. 1490 1500) is a painting by Hieronymus Bosch which shows prodigal humans wasting their lives instead of spending it in "useful" ways. The painting is dense in symbolism.

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Magnificent works of the great Leonardo Da Vinci

Various Vintage Cars that are insured with Art Insurance policy

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ART INSURANCE IN INDIA: There is opportunity for fine arts insurance business in India, China and Eastern Europe. These countries are culturally rich and have created a large amount of wealth. There are various private collectors of fine arts. Prices of fine arts are high and so its protection is also very important. For instance, a painting which is worth a million dollars would definitely require insurance because any harm done to this painting will definitely be a great loss to the owner. There has been a spurt in demand for contemporary Indian arts. The work of the Indian artists are creating market for the potential buyers, leading to the collection of those valuable works which should be insured for protection against any loss. Besides there is an exponential growth in transactions and investments in work of arts in India. Also, the pre and post war Indian Art is much in demand.

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10 steps to know how to opt for art insurance. 1. Do I need art insurance? Every owner of art will know the value [financially and emotionally] that he places on his art. Whether you are the artist who wishes to insure the artwork you have created or if you are the art lover who collects art, be it paintings and/or sculptures, you need to protect the pieces you own. Not only owners need to be aware of art insurance -but also those involved in the safekeeping of other people's art. Art insurance is required to protect from financial loss. Everyone, from the first time art buyer, the art enthusiast, the art collector, the artist and the gallerist should insure their art. 2. What can be insured under a policy for art insurance? Art insurance covers a much wider spectrum than many of us might be aware of. Insurance can be purchased to cover period furniture, books, carpets, clocks, gold, silver, precious metals, antique jewellery, maps, metalware, militaria, musical instruments, objects dart, objects of virtue, paintings, sketches, prints, philatelic, photography, political memorabilia, porcelain, pottery, ceramics, glass, jade, scientific instruments, statues, sculptures, sporting memorabilia, toys and more. 3. How much insurance do I need for my collection? There is no simple answer to this question as it will depend on the circumstances and the needs of the specific owner. You will need to determine the value of your collection, probably by having it professionally appraised. You may also choose not to insure the entire collection; instead, you could simply cover the more valuable pieces. It is important to keep in mind that art collections can inflate in value rather quickly and that the required cover might vary from year to year. 4. How much will art insurance cost? This might vary significantly between insurers and are dependent on the items and their value to be insured. The cost of the insurance changes if there is an added risk. Examples of risk would be the chance of the work being stolen, damaged or lost and the cost to recover or repair the work.

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The costs will also differ depending on where the art is to be kept or displayed. You might need to insure your work both at home and for exhibition. We would like to advise that you compare both insurers, cover and pricing through thorough consultation. 5. What else do I need when insuring my collection? When searching for the correct insurance, it is well worth coming prepared. We would like to advise that you collect and gather the following for your file:

An inventory list. You should compile a list of specific pieces you wish to insure if you are not insuring your entire collection. Proof of provenance. When you acquire a piece of valuable art, you should be given some sort of certification of its origin. It may be included as part of the original invoice, which you should also keep. Photographs of the artwork. Not only do you need to prove you owned the work, but you must also show the condition it was in at the time of purchase [before it might be damaged or stolen].

6. What are the typical claims under Art Insurance Policies? Whether you are a serious collector or individual who owns one or two major pieces, you need to know where the financial vulnerability lies. "The most common financial risk to art is not theft but fire, accidental damage and ownership disputes," says Gordon Massie, MD of Artinsure, underwritten by Hollard, who specialise only in insuring art, memorabilia and antiques. The most common & most expensive claims are:

Theft Physical damaged pieces Art work lost in fire or floods. Accidents that arise when the works are handled, transported or installed.

According to Massie: "Our Artinsure claims records confirm that in South Africa fire is probably the greatest catastrophic risk facing your client regarding their investment in art, antiques or collectibles. And it's not only destruction by fire itself that is the problem. Damage from smoke and fire-fighter's water can seriously depreciate the value of your client's assets. Effective risk management includes having an insurer with the capacity and expertise to facilitate post fire response, including the need to secure, stabilize and restore items.

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7. What records do you need to keep about your art? Not only are records needed when insuring the works of art, but also in the unfortunate event of having to submit a claim. Holly Alaimo of Dragonfly Gallery suggests the following:

Keep any sales receipts Collect any additional paperwork that speaks directly to the value of your art. Take a photograph of the art and keep it in a security box Have an antique piece assessed by an antique evaluator When a piece is by an up-and-coming artist, collect information on that artist and add it to your insurance packet.

It is best practise to review the artwork in your collection annually. A video camera can be an important tool to document your possessions. 8. Does your insurer understand that art often needs to be in transit? In South Africa, most claims on works of art arise from physical damage during transportation of the work and from theft of the work. The frequency of accidental damage loss is on the rise due to the amount of assets in transit on SA's roads as well as the condition of our roads. Example: An Ardmore Vase purchased for R200 000 at auction in October in 2008 in Cape Town arrived in Johannesburg with a chip on it. First indications are that after restoration it will be worth R60,000 a loss in value of R140 000. Insurance against this type of risk is vital to a collector and is not the type of cover one receives as a matter of course. This situation is an example of the need for specialist insurance that includes cover for decrease in value as a result perils of this kind. Art not only needs to be transported for displays, but also for restoration and reframing. Most conventional insurers panic at the thought of such valuable items being transported, and impose illogical and costly security measures and inflated premiums. You will need to find an insurer who is familiar to these special risks. 9. Is your insurance structured using the average clause or on an agreed value basis? On what basis is your works of art insured?

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Normal insurance, such as conventional householders insurance is subject to the average clause. Art insurance typically uses an agreed value basis. What is an agreed value of insurance? The agreed value basis is an agreement made between the insurers and insured that the payment for damage or loss of an item will be the value of that item. If your art is insured on a conventional householders or commercial policy, your claims will be subject to the average clause. This means that if your art investment has increased in value since your last insurance valuation, you may be under insured when a claim arises and the money paid to you will be less than the actual value of the artwork. 10. Why and when might it be important to consider a specialist art insurer? Specialization might be important for the serious collector in the event of an emergency. This could include:

Experienced backup by a team of people with the expertise to react quickly and appropriately to minimize loss. Specialization could provide both capacity and knowledge. Your insurer must be able to assist you in understanding your insurance policy and the fine print. A specialist insurer may assess your risks and reduce them where possible

Example: In the event of fire smoke damage penetrates layers of paint to different levels, depending on heat. This requires expert and sensitive restoration work. However, despite the most careful restoration, an art asset is likely to depreciate in value by up to 35%.

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Painting the future of art insurance Niche insurance provider, Pavilion Insurance, announces the launch of Art guard, a brand new art insurance solution for owners of art and collections throughout the UK. The policy covers theft, loss and accidental damage and damage in transit for a wide variety of art ranging from paintings and drawings through to glass and conceptual sculpture. Marketing Director Giles Rees said Many home contents policies dont cover art unless pieces are specified on the policy and this can often lead to a sizeable increase in premium. This is confirmed by recent research by specialist insurance company Hiscox, who revealed that 80% of art collectors do not have adequate cover for their collections and 30% have never sought a valuation. He goes on to say Art guard has been created to provide a specialist art insurance policy which not only offers a cost effective alternative, but also provides other features which will directly benefit art collectors and enthusiasts. One of these benefits is the ability to buy new items and have them automatically covered under the policy for 7 days, without having to specify or inform Artguard that its been bought. Other Artguard cover elements include loss of value and temporary removal cover. The policy features no excess on claims. To cover 5,000 of art would cost just 49 for the year. Buyers can get instant quotes and purchase cover online choosing to pay by credit card or direct debit. Fine Arts Insurance - Indian Trends: W o r l d over investments in Fine Arts have grown over by 55% annually Prices in Indian Art have risen by 20 times since 2001 Last year leading London auction houses reported 106 million of sales of

Indian Art

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Projection for the year 2011 double the figure Mahisasura by Tyeb Mehta was sold for a record 835,000 in

2009, 3 years back the same work was sold at 57,000. Bust of Maharaja Duleep Singh was sold in the year 2007 for which the

asking Price was 25,000-35,000. But later a private Indian Collector bought it for 1.7mn.

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SURVEY
Survey Methodology & Observations:

An exhaustive study was made to identify the Art Lovers possessing insurable object for which survey sheets were provided.

An interactive format in the form of a questionnaire was prepared for the purpose of conducting the survey and recording the responses.

Survey was limited to the boundaries of India and the common public.

Almost 50 people were handed with the sheets of questionnaire format.

During the various interview sessions with the common people it was

observed: 5 out of 10 people amongst the common public declined to be

interviewed i.e. Response rate 50%. The details provided can be rated at 4 on a scale of 1-10.

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QUESTIONNAIRE 1. Could you tell us all the different types of insurance you currently have? o o o o o o o o o o o o o o Life insurance Mortgage protection insurance Term Insurance Retirement plans Endowment Insurance Medical/Health insurance Critical illness Personal accident insurance Whole-life insurance Auto/Car insurance Money back insurance Travel insurance Unit-linked insurance All of them

2. What are the reasons why you do not own any insurance (besides those bought by your employer)? o o o o o o o o It's too expensive Insurance is not important, no reason to get it It is not necessary or worth doing It is too hard to understand/confusing I do not trust insurance companies It is too much hassle to get It is not worth of good value Employer sponsored cover is sufficient for me
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o o o

Insurance is not worth investing I am well-covered by my Employer do not know

3. Please tell us how well do you think you are covered? o Definitely well-covered o Probably well-covered o May or may not be well-covered o Probably not well-covered o Definitely not well-covered

4. How long do you think the cover amount will cover your beneficiaries? o Less than one year 11-15 years o 1-3 years More than 15 years o 4-7 years do not know/can't recall o 8-10 years

5. Please tell us if you have any plans to get insurance? o Definitely have plans to buy o Probably have plans to buy o May/May not have plans to buy o Probably have no plans to buy o Definitely have no plans to buy
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6. What are the reasons why you have no plans of buying insurance? o It is too expensive o Insurance is not important, no reason to get it o It is not necessary or worth doing o It is too hard to understand/confusing o I do not trust insurance companies o It is too much hassle to get o It is not worth of good value o Employer sponsored cover is sufficient for me o Insurance is not worth investing o I am well-covered by my Employer o do not know o All of them 7. Have you ever come across any term called art insurance? o Yes o No o May be o It's too expensive o 8. Do you think it is important to protect the priceless? o Yes, absolutely. o No

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o Maybe. o Priceless come with a tag of protection.

9. Given an opportunity would you prefer to take up art insurance for the protection of your valuables? o Yes. o No. o Maybe. o Definitely will plan to buy o It is too hard to understand/confusing o I do not trust insurance companies 10. Do you think there is a scope of art insurance in the future era? o Yes. o No. o Maybe. o There is a great scope. o Awareness should be created. 11.Is it required for the insurance companies to promote the art insurance through the means of communication as compared to the other polices which are being advertised? o Yes. o May be. o Definitely they must. o It will help people acknowledge its importance. o All of the above.

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12.Does art insurance as per you will add up to the scale of progress for overall economic development? o Yes. o No. o May be. o It will boost the economy. o Art lovers will actively anticipate.

S URVEYANAL IS YS .
%Aware %Unaware %Keen to know m about ore Art Insurance %Not Intrested to aware them selves about art insurance %Future of art insurance.

Observations: 100% of the respondents are aware of Art Insurance. 40% have taken Insurance and 60% are not insured (or not disclosed). None of the respondent have comprehensive insurance policy. 60% respondents prefer Insurance Company having better claim

servicing record.

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Conclusion: Thus this shows that there is a great scope for art insurance in India.

CASE STUDY ON

Introduction: The Company, IFFCO-Tokyo General Insurance Company Limited (ITGI) is a joint venture between IFFCO (Indian Farmers Fertilizer Cooperative) & its associates and the Japanese insurance giant The Tokyo Marine & Nichido Fire Insurance Co. Ltd. As a commercial gallery owner or private dealer, you want to make sure that proper coverage is in place for your consigned items or those owned by you or the gallery.
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It is also important that the proper amount of coverage is in place for items that are in transit or when they are on view with your client or at an art fair, framer, conservator or any other unnamed location. And in case of loss, you want to make sure that the valuation clause is appropriate and that the claim will be paid fairly and expeditiously. Whether you are a private owner or commercial gallery, we can cover your collection for all risks of loss or damage at any location. Our expertise is extensive and our relationships with the art world means that if you have to make a claim, you can be sure your case will be handled in the most sensitive way possible. What is Fine Art? rarity Objects subject to value appreciation due to age, Description, history or Paintings Sculptures Antiques Collectibles Bric-a-brac

What is covered? We extend the most comprehensive protection available in the world, covering against accidental loss and damage at your premises and also whilst the insured pieces are in transit. What is not covered?

Loss or damage caused by or resulting from:moth or vermin, warping or shrinkage

1. Natural ageing, gradual deterioration, inherent defect, rust or oxidation,

2. Repairing, reframing, restoring, retouching or any similar process 3. Aridity, humidity, exposure to light or extremes of temperature, unless

such loss or damage is caused by storm, frost or fire

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ART INSURANCE 4. Theft or dishonesty committed by or in collusion with any principal,

shareholder (beneficial or otherwise), partner, director or other officer or any employee of the insured, or any person to whom insured property is entrusted or loaned.
5. Loss or shortage discovered while taking inventory.

6. Loss of or damage to property unless it is entered in the insured's stock records.

Achievement in 1st year of operation:

ITGI issued its first policy on 16th January 2001. Since the number of satisfied customers of the Company has grown by leaps and bounds and ITGI has garnered a significant market share amongst the private players in the industry. It was one of the few Companies that generated profits in the first year of operation, a commendable task given the long incubation periods in the insurance industry. This was achieved mainly due to the technical skill of the employees, tie-ups with leading Reinsurance Companies across the world and focus on putting in place world-class system and processes.

Growth in the subsequent Years:

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ITGI and Fine Arts Insurance -Product Profile: Insurance companies are entering the least-explored domain of fine arts insurance. Iffco Tokyo General Insurance (ITGI) is one of the leading insurance companies in India which looks after art insurance sector. Very soon they up new the for and for are coming with niche two area, products in particularly vintage cars, another one musical instruments. Premiums on these products may not be uniform and would depend on clients and valuations of the assets. Following are the other details of the company: Capacity: - As per Lloyds Syndicates in the sector of Fine Arts the

company is solvent. Targets: - Private collectors, Art Galleries and Museums.

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Risk Coverage Provides all risks coverage:- A comprehensive ALL In premises In transit At an exhibition

RISKS coverage for accidental loss or damage while:

Risk Valuation: - Risks with limits up to US$ 25 million can be rated

within the capacity. Underwriting Facilities: - Under writing is centralized at corporate

office. ITGI has a treaty arrangement with underwriter Hiscox of the United Kingdom for providing risk cover in different segments. The underwriter has clients worldwide, including the National Gallery of London and museums in the United States.

Famous Indian Art Galleries & Art Work

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Birla Academy of Art & Crafts Gallery

Abanindranath Tagore

Seema Kohli Paines work Mahua Art Gallery

Jamini Roy

Ganesh Pyne

CONCLUSION:

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There is no reason for not having art insurance. True, it is quite expensive. Art Insurance premiums typically range around 3-4% of the face value of the art. While it seems like a small amount, in most cases, especially when the art in question is worth millions, the premium is not a small amount. You need insurance for your art because it is worth a lot of money. You need to be protected against loss or damage to anything precious or of high value that you might own. Often artwork is among the most expensive things that you own and it is also easily damaged and art thefts are not uncommon. Insurance against loss or theft of your art is the most common type of art insurance and it is always a good idea to have a policy that covers this. It is quite disheartening to lose your favorite and most valuable piece of art. In most cases, premium for this type of insurance is quite high. Therefore, it is a good idea to be at least partially covered. While it may not compensate the money you spent in acquiring the artwork, it can perhaps offset the cost of recovery. Art insurance that covers damage is extremely useful to protect you in the unfortunate event that the artwork is damaged. Usually damage policies cover all causes such as transportation, natural disasters, fire etc. Repairing art, especially sculptures is an expensive process as one would require experts to get it done. With all of it covered, the insurance company bears the risk while you pay the premium and they will handle the finances for you. In addition to loss and damage, you can also insure your art for repairs. While it seems the same as compensation for damage, it is sold separately because it only covers minor refurbishing such as polishing or framing. It doesn't include repairs that arise due to any damage, for which there is always damage insurance to go by. Art insurance also protects you against disputes that arise from the ownership of the artwork. In the unlikely event that the artwork you purchased was originally acquired through any unfair means and the original owner wishes to sue you, your insurance protects you from the legal fees and compensation that is sought. To avoid any such hassles, it is best to trace the origin of the artwork traced and purchase artwork only from a reputed dealer. Overall art insurance is a very useful and in most cases necessary entity to go with your art whether you are a dealer, private owner or owner of a private gallery. The best you can do is to choose the policy that you feel is right for you. Art insurance is expensive but that is no reason not to have it. The importance of it undermines the price and if you can afford a very expensive piece of art you can just as well afford the insurance for it! Webliography:
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1. Google 2. Yahoo 3. MSN.com 4. Wikipedia.com

5. www.louvre.com

6. ICICILombard.com/GeneralInsurance
7. MaxBupa.in/Agent 8. jumpstart.co.in

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