Art and Insurance Series #3:

Five Reasons Why Artists Need Insurance

I know, insurance is expensive and maybe right now it is just not a priority. Your work is selling and your name is becoming known. But even if, due to the economy, your work is not selling as it was, insurance is still recommended. Your insurance policy can be tailored to your needs and kept within the limits and types of coverage affordable to you. When things pick up again, re-examine your policy. Even if you are almost ready to break through and you don't have the time to focus on anything but your work, you should still take the time. There are so many unexpected things that can happen any one of which could set you back disastrously.
For example:

• Bad weather (excessive amounts of rain or maybe the pipes freeze and burst - water all over the place, including your studio)
• Burglary - your work may be stolen or irreparably damaged
• Fire - it could be just a small fire. Most of the time the damage is not caused by the fire itself but by the smoke and/or the suppression used by the fire fighters
• You accidentally run over some of your work that you forgot you leaned up against the car when you loaded it all from an exhibit
• While at a show one of your works falls off its display area and is damaged
• You ship your work to a buyer but it doesn't make it. Somewhere between your location and the buyer's location the piece went missing. Now you have to refund the buyer and you have nothing to show for your work.
• You have a fantastic opportunity to display your work but you didn't realize that when you were moving the piece it caught on something and tears from one end to the other.

Are you willing to cover 100% of any losses? When taking out insurance, you are simply saying that 100% risk is too much for you. Let your coverage work for you when you do have a loss.

There is insurance available for just about everything nowadays. Maybe you were unaware that insurance could be obtained for your specific needs as an artist. Think inside the box - there are auto, life, medical, dental, homeowners and many other common policies. Many of these, such as auto insurance, are mandatory. Now, for a moment think outside the box and the world has no boundaries. Your work is not confined so why should your insurance coverage be?

There are actually a great deal more reasons to have insurance. These five I feel are important and everyone in the arts should seriously consider each one. The ones discussed here are all equally important.

1. Your work is an extension of yourself. You give it life.

   There are many commercials out there now that talk about life insurance - protecting your loved ones is way up there on the importance scale. Okay, since your work encompasses a part of you and you make it alive, wouldn't it be a smart idea for your work to have "life" insurance? Your work is not the same as the television set or furniture that can easily be replaced. You just can't go down to the local store and pick up a replacement for your work. When it is gone - it's gone.

2. Anything of value should be insured.

   It doesn't matter whether or not your work has sold yet - IT HAS VALUE! In one of the classes for adjusters that I taught a few years back, I asked the group about the value of art. How would you, the adjuster, know what the value is if a claim is filed? If your car is involved in an accident, establishing a value for settlement is not difficult. After all, you purchased it at a local dealer and there are pricing guides available. With that in mind, how would you value a painting at your local arts and crafts store? I mean after all, isn't it just a canvas with paint on it which can be replaced for a few dollars - claim closed, right? I don't think so. When you are in a gallery do you see the canvas and the paint or do you see the art? Think about a book - is it ink on paper so replace it with ink and a stack of paper. Canvas and paint don't make the painting - the artist makes the painting.

3. Insurance offers peace of mind.

   If you were involved in an auto accident isn't it a relief to know that you have insurance to cover at least the other party(ies) involved? Maybe there is a medical emergency in your family - the family is more important than the bills that are rapidly growing. But there will come a time when the bills must be reviewed and paid. This is all much less stressful when you know that your medical insurance will cover a large part, if not all, of the bills.

4. Insurance protects you in many ways.

   Let's just say that you are taking your work to an art show or exhibition of some kind and your friend asks you to also take a couple of his or her pieces to exhibit (or even sell). Wow, that would be great because you know your friend will return the favor and you will get more exposure. You have loaded your vehicle with all the art pieces and are on your way. You arrive early so that you have plenty of time to set up. You turn your back just for a second and your friend's piece falls off the wall and is damaged. It will never look the same even if it could be restored. You arrive back home and who is waiting for you hoping for good news? Yep, your friend. The response is not what you thought it would be. The saying "you broke it you bought it" comes to mind. Now what do you do? You are a starving artist just like your friend. Well, guess what? You heave a sigh of relief. Why? You have insurance and your policy covers the works of others when it is in your care, custody and control.

5. Just because this is number 5 doesn't mean it is not as important as the other four. If you think about it, this reason is way up there on the importance scale.

   You make a living (or plan to when your work takes off) from your work.

   You make a living off your product - that is your business, the sale of fine art. Well, then treat it like you would any other business. Your product needs to be insured. If your product becomes damaged or is stolen, what would you do? You really needed that piece to sell. This will affect the bottom line in your income/loss. This doesn't have to be a setback. Your business product is insured. The damage/loss is protected so that you don't have a financial loss. When you are in the middle of creating something that is spectacular and you are letting it flow to the canvas, the last thing on your mind is, "What if someone steals this?" Never forget though that you are a business person and this is your work. There are a lot of things that are factored in to determine premium (payment) for a policy, like how much coverage you are asking for, the location of your studio, where you keep the finished work, and where you exhibit it. Something else that could affect the premium would be the exclusions. In every insurance policy, no matter what type, there are events that cause a loss that are not covered. A couple of common ones are volcanic action, nuclear explosions and such. Exclusions, loss causes that are not covered under your policy, can be tailored to your needs. A good example would be if you didn't need coverage for items that are in transit. Then this can be excluded from the policy. One way to save on premium is to take out an endorsement to your policy that is only for a specific exhibit. An endorsement is part of the written contract that makes specific changes to your policy. Why should you pay for coverage that is not needed year round? You may already have a homeowner's policy but unfortunately it does not cover your business or if it does afford some coverage it is very limited. What I would recommend is to spend some time writing down what you want your coverage to include and what dollar amount you would like. Write down what the next year events will be and keep those off to the side. When you have this information, contact an agent who specializes in insurance for artists. The policy can be tailored for you.

Don't make the mistake of thinking that just because you have homeowners or contents insurance that you are protected. Remember, this is your business and will be looked at by the insurance company as your business. It is a work product. I know that is hard to think about insurance coverage when you are in your studio focused on your work. When it comes to insurance, you need to put your business hat on. Don't think lightly on the business side of art. Most people don't think about insurance until AFTER a loss. But is it worth the gamble?

Take some time and look over your homeowners/contents policy. You may find that the limit of liability on your policy for fine arts is very low. You may also find that your business product is not insured the way your living room sofa is. Take the time to sit down and seriously figure out your business. It is not the canvas and paint - it is fine art.

As independent as your work is, reflecting your unique artistic style, your insurance can be an extension of that work. A unique policy written just for you can offer the protection needed should something happen. While we all hope that there never comes a time where you would need to make a claim, knowing that your work is protected allows you the freedom to do what you do best - create!

Art and Insurance Series

Shaunda Clifton, fine art claims adjuster and writer, will be contributing a series of articles on insurance and the artist for Fine Art Registry. Read the first article in the series, and look for future articles on the following subjects:

• Art and Insurance Series #1
  I Filed My Claim, Now Where's My Money?
• Art and Insurance Series #2
  Insurance - What the Heck Does That Have to Do with Me?
• Art and Insurance Series #3
  Five Reasons Why Artists Need Insurance
• Art and Insurance Series #4
  Insurance is Not "One Size Fits All"
• Art and Insurance Series #5
  OK, So Do I Go to My Local Agent?

— by Shaunda Clifton  |  November 11, 2009

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