Art – Gallery Loss

Protecting Your Art Gallery

Galleries face unique commercial insurance risks. Examples of these hazards include:

• An art handler hanging a painting at a collector’s home drags a crate across the client’s hardwood floor, damaging the floor
• A celebrity comes to an art opening and trips on a sculpture breaking her nose
• An artist’s estate sues you for using their image for advertising without permission
• An art advisor makes inappropriate comments and offends your desk attendant

Taking the time to address these risks in advance can free you to concentrate on your collectors, building relationships and making sales.

Property Risk

• Know the natural disasters that could affect your business based on your location and develop an emergency response plan. It should include a contact list for employees and contact details for your vendors. Have a back-up plan for where and how you could continue to conduct business if your current location is damaged.
• Gather Emergency Response equipment and supplies, including items such as a dehumidifier, weather radio, extension cord, wet vacuum, papers towels and sponges, flashlights, food, extra batteries, first aid, gloves, water, etc.
• Conduct regular walk-throughs of your space looking for signs of potential leaks, fire hazards, equipment breakdown or other issues and address them.
• Protect your property from unwanted break-ins by installing burglar and fire alarm. Train employees to be aware of their surroundings when opening and closing. Limit the number of keys you hand out and know who has each set. Install cameras when possible and confirm the data is recorded and saved for at least 30 days.

Liability Risk

• Before an exhibition opens, conduct a walk-through and look for potential trip and fall hazards including electrical cords or sculptures. During openings and art fairs, place stanchions or employees in front of these hazards to avoid unnecessary trip and falls.
• If possible, avoid serving alcohol at events. If you do serve alcohol, notify your broker and be sure you are legally able to serve.
• Know the maximum number of attendees that can be on your premises based on fire If an event is popular, monitor the activity outside the gallery and set-up barriers and other safety measures.
• Look for un-evenness in floors or gaps in sidewalks; address these issues.

Employment Practices Risk

• Employees are your greatest asset. Educate yourself about the potential risks related to sexual harassment, discrimination, invasion of privacy, breach of contract, emotional distress, etc., and follow fair practices.
• Develop a policy and set a standard related to Employment Practices. Share this with your employees upon hiring. Conduct training and set an example of appropriate behavior and conduct toward employees, clients, vendors and patrons

Workers Compensation Risk

• Conduct regular training for your employees about safe lifting practices and encourage employees to notify you in the event of injury.
• In job listings, include details about the physical requirements of employees, including how much weight they may need to lift.
• Purchase tools that eliminate unnecessary strain such as J-Bars, hand trucks, dollies and pallet jacks. Make sure your employees are trained about their proper use.

Advertising Risk

• Educate yourself about the legal terms related to advertising risk such as libel, slander, invasion of privacy, copyright infringement and misappropriation. Stay informed about recent cases in your industry.
• Develop a policy regarding the images you use in your advertising and share this with employees. Always ask permission from your artists and from artist estates to use images for advertising or reproductions for sale.

Certificates of Insurance

Collect Certificates of Insurance (COI) from vendors or contractors, such as art shippers, contractors, advisors, etc., that conduct work on your premises. This protects you if their behaviors lead to a loss because you can be sure they have appropriate insurance and that their insurance protects you. At a minimum a COI should include:

• Evidence of Commercial General Liability Coverage with the following:
• Listing your gallery as Additional Insured
• Listing your gallery as Loss Payee
• Waiver of Subrogation
• Evidence of Workers Compensation Coverage

Know Your Coverage

• If you rent your space, review your lease and understand your responsibility regarding insurance for your property.
• If you own your space, know the value of your property through regular appraisals and be sure you have sufficient coverage.
• Keep an inventory of your business property (such as computers, furniture, etc.), in addition to fine art inventory, and be sure you have sufficient coverage.

When A Loss Occurs

• Notify your broker and/or insurer of any incident.
• Properly document every incident with an incident report that includes the date, names of witnesses, photos and names of emergency responders such as police or Keep these reports on file.
• When in doubt, reach out to your insurance broker or Berkley Asset Protection for further guidance.

It is important that your clients understand the medium of each work in their collection. From there I can work with you and your client to identify the perils which affect each medium and come up with a custom risk management plan for all insured pieces.

The primary cause of loss or damage is related to errors in shipping and packing.  Not all vendors are created equal.  In fact, don’t be fooled by those claiming to have fine art expertise. Always ask for referrals and make sure to provide as much information and instruction as possible so that the best qualified firms and professionals service your collection.  Berkley Asset Protection can provide vendor referrals and shipping and packing guidance as needed.

While cost savings are often preferred, it is best to look at the reputation of vendors when choosing with whom to work. Ask trusted friends and associates who they prefer to work with and feel free to reach out to Berkley Asset Protection to get recommendations. Shipping is when some of the most damage occurs. A shipper should be willing to provide detailed instructions on how they will handle and ship the property. If a shipper withholds information or fails to provide requested information about packing and handling… look elsewhere. Hiring a fine art shipper with expertise in the specific medium you own is invaluable. It is important to know the medium and materials that make up a piece that is shipping, especially with contemporary materials so that a shipper can be certain the piece can safely make it through customs. A good installation company should ask a lot of questions about the piece and about the type of wall the work will hang on. For complicated installations they should be willing to come to your home and take measurements in advance.

Having an updated database with back-up will be necessary in the event of a catastrophic loss to a client’s collection. Keeping images and invoices will be instrumental in settling a loss in a timely manner. When choosing a database ensure that it tracks location of pieces so that a client can always recall where specific pieces are located. This is also a good place to store bills of lading for shipments as those may come in handy in the event of a claim or a shipping dispute. Be sure to scan and keep copies of all sides of bills of lading.

Be proactive! Develop a plan, and execute!