In Late August last year, a phone call was made from New York about the growing threat of a hurricane forming off the coast of Louisiana. The voice warned that the effects were going to be devastating. The recipient of the phone call responded immediately by summoning a small private army of independent contractors, a plane ride to New Orleans, a couple of field experts, and amphibious vehicles that could cope with the rising waters and evacuate the various targets to safety.
Sadly, this prescient act was not the work of the US government, but of the private art insurance company AXA, whose actions led to the collection, safekeeping and restoration of more than 2,000 works of art directly in the hurricane's path. The operation cost the company millions of dollars, but it saved and safeguarded countless, irreplaceable items that otherwise would have been destroyed or looted. Don't you wish your insurance company could do the same for you?
The recipient of the phone call was Christiane Fischer, the chief executive officer of AXA Art's operations in the US. Because of the work of Fischer and her 'crisis team' at AXA, at least one small disaster in New Orleans was averted. For those of you wondering why the company couldn't have used the same money and resources to save lives, AXA annually contributes millions of dollars to charities and funds, including a hefty donation to the Red Cross to help out the victims of Katrina.
AXA's response was unusual and concentrated primarily on private collections that were insured by the company, rather than works owned by public institutions. Privately owned works are invariably very well insured and protected in the US, but what of the public collections?
After 9/11, insurance rates for museums soared by as much as 50 per cent and museums in New York found themselves forced to pay 'terrorism coverage' for works borrowed from abroad. Now, post-Katrina, insurance rates that were already unaffordable for many museums continue to climb. Add to that rocketing fuel prices, which have increased shipping costs for touring exhibitions, and there seems to be no end in sight for many institutions already stretched to the limits of their resources. While awareness and preparedness have increased, so have costs.
In George Bush's 2006 budget, only 1 per cent was allocated to the arts in the US, and almost all of this went to the National Endowment for the Arts and its domestically oriented programmes with names such as the Challenge America Arts Fund, We the People, and American Masterpieces. This was not good news for museums wishing to put on exhibitions from abroad.
Given the government's attitude to culture, it will come as no surprise to find that it provides very little indemnity for art in the US. The only example of government indemnity I could find was a little-known act passed in 1975 by former US president Gerald Ford: the United States Government's Art and Artifacts Indemnity Program (also known as the Arts Indemnity Program).
According to the Chubb Insurance Company, the act covers domestic and international loans to American museums. In the 31 years since the act was passed, its cover has only been granted to a few hundred exhibitions, mostly in larger, well-funded institutions and there have only been two claims, the most recent of which was more than ten years ago. The combined cost of both claims cost the US government less than $105,000.
So either the indemnity is not widely known or incredibly difficult to use. Either way, smaller museums lose out. One spokeswoman from a small museum in Key West in Florida explains how it copes with the complications.
'We have three different insurance companies covering different possibilities,' she says. 'These are one for fire and theft, one for liability and, of course, one for workmen's compensation, in case an employee has a mishap. A fourth company covers medical for our employees. Our insurance coverage is very expensive because we are a commercial business, and also because we have a swimming pool and three separate buildings.'
A more likely approach is that smaller institutions that can afford it take out blanket coverage - a policy that covers an amount less than the full value of their collections. The value is based on the 'maximum probable loss', the estimated amount of loss that a single event such as a flood or an earthquake might cause, but that would not destroy the entire museum collection.
A cheaper but more time-consuming method employed by smaller collections is the 'schedule' system, where a museum will insure a limited number of specific pieces based on their market value at the time of loss. While providing full cover for those pieces, the items have to be constantly reappraised and the method is impractical for larger collections.
Because of fluctuations in market values, exposure to the public and the irreplaceable nature of most items, insurance companies in the US want to see extremely high standards before they'll insure any institution or individual. Some, such as AXA and Chubb, are very proactive and provide advice, consultation and referrals in order to safeguard insured works.
Quite often, if the advice is not heeded, or standards maintained, museums can find themselves with an insurance company that is unwilling to underwrite them unless they comply with its rules.
Conversely, if a museum finds itself with a less 'hands-on' insurance company (usually the ones who don't specialise in art insurance), it may suffer a loss only to discover that its coverage has more loopholes than a knitting convention.
The US and the UK have something in common when it comes to museums: both have countless public exhibitions filled with works of art worth billions, which are difficult to trace if lost, impossible to replace and, it would seem, very easy to steal. And yet most of them are not insured against anything except fire and water damage, unless they're on loan from a private collector (who's indemnified against loss by the government and also by their private insurance companies). It would seem that the buildings these works of art are housed in are better protected than their contents.
Ed Able, the recently retired chief executive officer of the American Association of Museums, sums the situation up: 'In this country, a lot of museums are not-for-profit organisations, but are still seen as being privately owned. What with heightened risks, such as terrorism and natural disasters, not a lot can be done. No museum can afford to insure the value of their collections and the US government could do a lot more.'
He adds: 'Talk to your colleagues about the issues. Always bid your coverage among a number of providers. Consult with security experts to reduce insurance costs. Re-bid your policies every three to five years and always, always read the small print.'
Jamie Lewis is a freelance journalist based in the US
Sadly, this prescient act was not the work of the US government, but of the private art insurance company AXA, whose actions led to the collection, safekeeping and restoration of more than 2,000 works of art directly in the hurricane's path. The operation cost the company millions of dollars, but it saved and safeguarded countless, irreplaceable items that otherwise would have been destroyed or looted. Don't you wish your insurance company could do the same for you?
The recipient of the phone call was Christiane Fischer, the chief executive officer of AXA Art's operations in the US. Because of the work of Fischer and her 'crisis team' at AXA, at least one small disaster in New Orleans was averted. For those of you wondering why the company couldn't have used the same money and resources to save lives, AXA annually contributes millions of dollars to charities and funds, including a hefty donation to the Red Cross to help out the victims of Katrina.
AXA's response was unusual and concentrated primarily on private collections that were insured by the company, rather than works owned by public institutions. Privately owned works are invariably very well insured and protected in the US, but what of the public collections?
After 9/11, insurance rates for museums soared by as much as 50 per cent and museums in New York found themselves forced to pay 'terrorism coverage' for works borrowed from abroad. Now, post-Katrina, insurance rates that were already unaffordable for many museums continue to climb. Add to that rocketing fuel prices, which have increased shipping costs for touring exhibitions, and there seems to be no end in sight for many institutions already stretched to the limits of their resources. While awareness and preparedness have increased, so have costs.
In George Bush's 2006 budget, only 1 per cent was allocated to the arts in the US, and almost all of this went to the National Endowment for the Arts and its domestically oriented programmes with names such as the Challenge America Arts Fund, We the People, and American Masterpieces. This was not good news for museums wishing to put on exhibitions from abroad.
Given the government's attitude to culture, it will come as no surprise to find that it provides very little indemnity for art in the US. The only example of government indemnity I could find was a little-known act passed in 1975 by former US president Gerald Ford: the United States Government's Art and Artifacts Indemnity Program (also known as the Arts Indemnity Program).
According to the Chubb Insurance Company, the act covers domestic and international loans to American museums. In the 31 years since the act was passed, its cover has only been granted to a few hundred exhibitions, mostly in larger, well-funded institutions and there have only been two claims, the most recent of which was more than ten years ago. The combined cost of both claims cost the US government less than $105,000.
So either the indemnity is not widely known or incredibly difficult to use. Either way, smaller museums lose out. One spokeswoman from a small museum in Key West in Florida explains how it copes with the complications.
'We have three different insurance companies covering different possibilities,' she says. 'These are one for fire and theft, one for liability and, of course, one for workmen's compensation, in case an employee has a mishap. A fourth company covers medical for our employees. Our insurance coverage is very expensive because we are a commercial business, and also because we have a swimming pool and three separate buildings.'
A more likely approach is that smaller institutions that can afford it take out blanket coverage - a policy that covers an amount less than the full value of their collections. The value is based on the 'maximum probable loss', the estimated amount of loss that a single event such as a flood or an earthquake might cause, but that would not destroy the entire museum collection.
A cheaper but more time-consuming method employed by smaller collections is the 'schedule' system, where a museum will insure a limited number of specific pieces based on their market value at the time of loss. While providing full cover for those pieces, the items have to be constantly reappraised and the method is impractical for larger collections.
Because of fluctuations in market values, exposure to the public and the irreplaceable nature of most items, insurance companies in the US want to see extremely high standards before they'll insure any institution or individual. Some, such as AXA and Chubb, are very proactive and provide advice, consultation and referrals in order to safeguard insured works.
Quite often, if the advice is not heeded, or standards maintained, museums can find themselves with an insurance company that is unwilling to underwrite them unless they comply with its rules.
Conversely, if a museum finds itself with a less 'hands-on' insurance company (usually the ones who don't specialise in art insurance), it may suffer a loss only to discover that its coverage has more loopholes than a knitting convention.
The US and the UK have something in common when it comes to museums: both have countless public exhibitions filled with works of art worth billions, which are difficult to trace if lost, impossible to replace and, it would seem, very easy to steal. And yet most of them are not insured against anything except fire and water damage, unless they're on loan from a private collector (who's indemnified against loss by the government and also by their private insurance companies). It would seem that the buildings these works of art are housed in are better protected than their contents.
Ed Able, the recently retired chief executive officer of the American Association of Museums, sums the situation up: 'In this country, a lot of museums are not-for-profit organisations, but are still seen as being privately owned. What with heightened risks, such as terrorism and natural disasters, not a lot can be done. No museum can afford to insure the value of their collections and the US government could do a lot more.'
He adds: 'Talk to your colleagues about the issues. Always bid your coverage among a number of providers. Consult with security experts to reduce insurance costs. Re-bid your policies every three to five years and always, always read the small print.'
Jamie Lewis is a freelance journalist based in the US
