Our Private Clients team have put together this helpful guide to highlight the key points which need to be understood and considered to ensure that your private art and antique collections have the appropriate level of cover should you ever need to make a claim.
Specialist collections deserve specialist insurance cover
High value assets require enhanced risk management and insurance is an essential tool in managing a loss. Buying the most suitable insurance will make a significant difference when a claim is made, both in terms of the way it is dealt with and ultimately the amount of money that will be paid out. Fine art and antiques can have a higher risk of loss than standard contents due to their intrinsically unique nature. This can be due to their fragility, their desirability or ease of converting in to money.
There can be a significant difference between insurers that understand the nature of art and insurers that deal in mass market standard products. Specialist insurers may have in-house art security surveyors and access to the leading art loss adjusters. Trying to explain the value impact of a hair line crack on a Song Dynasty bowl to a standard insurer could be a hard task.
Protecting your collection in case of a loss
One of the most fundamental questions to ask when purchasing insurance is what settlement will be made in the event of a loss. Standard insurance policies tend to have low single article limits i.e. insurers may only pay up to a certain amount per item, for example £5,000. This may be insufficient for many art or antique collectors and would also not factor in any depreciation following partial loss. For example if a painting valued at £20,000 suffered partial damage and the cost of restoration was £500, a standard policy may only pay out £500. However, as a result of having the restoration work carried out the value of the painting may be reassessed and have depreciated by £5,000. A specialist enhanced insurance policy is more likely to settle the claim at £5,500 to cover the cost of the restoration and the depreciation caused by the damage.
The valuation of a collection should be carried out by a specialist valuation company, dealer or auction house. We normally recommend that valuations are carried out at least every 3 years to make sure they are kept up to date.
The details count
Fine art and antique collections can be insured on a stand alone policy or they can be included in a high end household policy. When collections are large they are usually put on a stand alone policy but both options normally have to be bought through a broker.
Your broker should work with you to check your policy wordings for clauses that state a minimum amount of security is required. Depending on the value of the art or antique collection some insurers will insist on security arrangements such as; monitored alarms, five lever mortice locks and window locks. The occupancy of the property is another important factor which you will be required to disclose. If a secondary residence is left unoccupied for long periods of time this is likely to affect the way insurers view the risk.
It is important to check if your policy is set up on an 'all risks' basis, meaning every eventuality is covered apart from stated exclusions, or on a 'perils only' basis with every other eventuality being excluded. The first option is far more desirable.
If possible it can also be advantageous to have photo records of your collection in addition to an inventory, both of which are stored safely where they will not get damaged or lost. These records will assist you and the insurer should you need to make a claim.
Transporting your collection
On occasion you may need to transport part or all of your collection and it is important that you have the right level of cover to do so. If transporting higher value works a specialist shipper should be employed as some policies exclude damage to artworks that have been transported by a standard courier. It is worthwhile checking that your policy doesn't already include cover for transporting your collection before you agree to use the shipping company’s insurance cover.
We all hope that we won’t need to make use of our insurance and claim, however you will have peace of mind should you ever need to make a claim if you have the right level of cover in place.
For more information on the issues above visit our Private Clients insurance page
Whilst care has been taken in the production of this article and the information contained within it has been obtained from sources that Aon UK Limited believes to be reliable, Aon UK Limited does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the article or any part of it and can accept no liability for any loss incurred in any way whatsoever by any person who may rely on it. In any case any recipient shall be entirely responsible for the use to which it puts this article.This article has been compiled using information available to us up to 26.03.15.
Whilst care has been taken in the production of this article and the information contained within it has been obtained from sources that Aon UK Limited believes to be reliable, Aon UK Limited does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the article or any part of it and can accept no liability for any loss incurred in any way whatsoever by any person who may rely on it. In any case any recipient shall be entirely responsible for the use to which it puts this article.
This article has been compiled using information available to us up to 15/01/21.