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The Good, the Bad, and the Flood Insurance: Protecting Your Art Against Disasters

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Insurance. Most people have some, most likely for a vehicle, perhaps for a house, and sometimes for their very lives. Obama briefly made health insurance a requirement for all Americans with the Affordable Care Act’s individual mandate. What a lot of artists avoid or put off is buying insurance specifically for their art business. Similar to hiring a lawyer to help with contracts, many of us figure our art is covered well enough by our home or renter’s insurance. It turns out, that assumption leaves you totally unprotected.

Insurance is actually a pretty new industry. It was just getting started in the last pandemic, the Spanish flu of 1919, which caused an explosion of growth with traumatized people buying life insurance in huge numbers for the first time. A Google search for “why is insurance” brought up suggestions of “expensive,” “complicated,” and “high” in that order, indicating that the public perception of insurance is that most of us feel like we’re paying a lot of money for something we don’t really understand. And yet, with the general consensus that we need it, the questions really are: what kind of insurance do I need and how much is it going to cost?

In an effort to make a dry subject a little more enthralling, I’ve provided a number of scenarios in this article, but please remember: I am not an insurance broker, and the companies mentioned here have not paid for an ad. The bottom line is that you need to do your own research to purchase the right package for yourself and your specific professional needs. I consulted two insurance companies for this article that specialize in different sectors of the art insurance market—Veracity Insurance, based in Utah, which offers a popular policy specifically for creatives called ACT (Artists, Crafters and Tradesmen) which covers artists participating in public events such as conferences and fairs, and MDP Insurance, based in Maryland, which specializes in putting together packages for general liability and artist inventories.

 

J. M. W. Turner, Snow Storm: Hannibal and his Army Crossing the Alps, 1812, oil on canvas
Did you know that if your studio space were to flood, destroying your work and materials, you’re most likely not covered by a homeowner’s insurance policy or even a fine art protection policy?
Suzy Kopf

Here in Baltimore, a lot of artists work out of their basements. Coming from the west coast where frequent earthquakes make underground dwellings a rarity, sometimes when I’m driving through the neighborhoods of Charles Village or Lauraville or Mayfield, I like to think about artists toiling below the ground of quaint Victorians or split-level suburban-style homes, like prairie dogs with power tools. But did you know that if your studio space were to flood, destroying your work and materials, you’re most likely not covered by a homeowner’s insurance policy or even a fine art protection policy?

Baltimore painter Cynthia Daignault was more prepared than most, having purchased a small business owner’s insurance policy for her materials and equipment as well as basic liability for the studio. Over email, she explained to me that she added to her policy a special fine art rider to cover her finished artwork which she describes as “$$$$” and figured she was well prepared for any catastrophe. But when her studio flooded and she lost $50,000-worth of materials and priceless finished works, she found out that she was not covered for flooding. When applying for emergency funding, Daignault realized that those kinds of funds are generally put together for widely acknowledged natural disaster events like forest fires and hurricanes—but since Daignault’s flooding occurred during a heavy rainstorm, she couldn’t find any assistance. Now Daignault buys health insurance, business insurance, an art rider, and flood insurance, which comes to about $1,500 a month in total. At these numbers, she completely understands why so many artists decide to forgo insurance altogether, but for herself, she has decided “it’s a lot—but losing so much was worse.”

According to agent Troy Smith of ACT, weather is actually the biggest factor in the claims they see on their ACT policy, which was designed with artists who show at short-term and high-volume fairs and conferences in mind. “Most claims we see are weather-related, someone’s tent will be picked up and damage something else—artwork, vehicles, and buildings,” Smith says. “We’ve paid to fix cars, art, and property.” An ACT policy can be purchased for a single three-day event or annually, so most of Smith’s clients are artists participating in art fairs, craft conventions, and other temporary events. The policy can be extended to cover longer periods of time if needed, but it is not intended to cover public art installations (you might look into an Installation Floater policy for that).

ACT is also not in the business of assigning value to your art, a mistake that many artists make when buying insurance—it’s important to remember that insurance does not cover the sales value of fine art, only the materials necessary to remake the work. “Our policies are designed to take the supplies that were necessary to make the work and replace them,” Smith explains. “The primary purpose of the ACT policy is to cover liability in case of injury.” So if someone falls in front of your exhibition tent or sues you because they claim a process you taught them was harmful, there are insurance policies that can protect your assets.

MDP creates packages for artists to offer them the fullest coverage. According to agent Meghan Shriver Coleman, this “typically includes General Liability, Inland Marine/Fine Art, Installation Floater (if Public Artist) and sometimes Workers Compensation” depending on the profession. MDP often works with artists to combine different types of insurance to offer the best coverage, and Coleman cautions, “adding to a homeowners policy doesn’t provide adequate coverage nor does it contemplate the full operations of an artist’s work and exposures. It’s extremely important that artists speak to their homeowners insurance carrier and review their policies for appropriate coverage.”

So even if you think you’re covered, you really need to check your current policies to be sure. “We don’t recommend adding the completed works or work in process to a homeowners policy because we have found that it doesn’t always cover in the way the artist has intended,” Coleman continues. What generally works better for artists are policies that specifically cover the works while they are being made as well as once they’re completed.  

Whether you’re thinking about participating in fairs again post-COVID or just want to protect your work while it’s living in your basement, insurance is worth looking into. You might be surprised how affordable some policies are (ACT starts at $49 for a three-day event policy). When you’re buying a policy or package, make sure to speak to an agent to understand all the exclusions and really assess if you’re buying the coverage you think you’re buying. It just might make the difference.

 

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