Open Forum

 Hi Terry, 

Careful stewardship of a collection is essential in order for a given institution to fulfill its mission and obtaining appropriate art/collections coverage insurance is an important component of an your total risk management program. 

I urge you to consult with your own insurance broker, but I can suggest that when determining limits for your Fine Art insurance policy consider:

1. Couple effective collection inventory control techniques with known values.  While it certainly is not feasible to have current appraisals for every item in the collection done every three to five years it may be a good starting point to look to the past.  If you have 10 or 20 year old appraisals, these could be unofficially updated with staff research conducted on recent action results.  This action could provide a starting point and from there your institution may be able to make current market value estimations in order to help set policy coverage limits.  

2. The total dollar amount required to replace key items in your collection and what dollar amount would be needed in order to continue your mission as a cultural institution.  These works of art may be what’s commonly referred to by insurance professionals as the institution’s “Top Ten” list. Understanding that financial resources are limited, when considering whether or not to undergo the appraisal process, you might what to consider having these works of art formally evaluated by a professional appraiser every three to five years.  

3. The total value of all long and short terms loans, including gifts awaiting final approval, as in the event of loss you will be required to make lenders to your institution financially whole in accordance with values established by loan agreements. It is vital that loan agreements are in place for all loans and that they are routinely reviewed, updated, and re-signed.  If nothing else, consider insuring to 100% of this total. 

4. The  Probable Maximum Loss in any one event, meaning if a fire breaks out in “Gallery A” how fast would it spread to “Gallery C” or “Gallery D” and what would be lost or damaged along the way.  Also consider where you have the highest concentration of values and remember this location could be your storage location. 

It is not an exact science and I do not have statistics on the number of insured vs. uninsured museums, but I can tell you that some combination of the above will assist in generating an accurate and appropriate limit for your institution.   

Additionally, in order for the museum to attract and retain competent trustees it’s important that Directors and Officers (D&O) Insurance be considered in addition to collection coverage.

I hope this helps,

Casey

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Casey Wigglesworth
Account Executive
Huntington T. Block Insurance Agency
Washington DC

Original Message:
Sent: 05-12-2016 04:07 PM
From: Terry Emma
Subject: Insurance for Collections

We are updating our insurance coverage and wondered how many Museums insure their collection and how value is determined.

TERRY EMMA

Executive Director

Director@genevahistorymuseum.org

113 S. 3rd St. • Geneva IL 60134

630-232-4951