Why Art Insurance Is Important For Your Art?

1. Art Gallery Insurance Is your gallery insured to cover all risks?

2. Why you need insurance for your art gallery? • The International Criminal Police Organization (INTERPOL) has a database of more than 50,000 stolen work of art.  • Among other risks, theft is one of the most significant risks art museums and galleries face. • Art gallery insurance covers your art gallery business, its property, and its artwork.

3. What risks is your gallery exposed to? • Hammer damage A popular artist has agreed to put their artwork in your gallery with strict guidelines of the décor. You delegate the tasks at hand to your employees, and soon after, you hear a loud crack. One of the employees has hammered his own nail instead of the nail. • Splatter disaster It’s the opening of a new artist’s exhibition, and the people seem to be enjoying the line of hi-tea and soft drinks along with the art. Everything looks perfect until you notice a person tripping on his shoelaces and spilling his drink on an artwork. • Transit tension You’ve confirmed a new batch of artwork and are excited to see it arrive. To your dismay, you get a call from the courier to inform you that an accident has happened. The accident has damaged some of the artwork in transit.

4. What insurance does your gallery need? Here are some common insurance policies that your gallery will require: • Business Owners Policy • Workers Compensation Insurance • Commercial Auto Insurance • Commercial Property Insurance • Commercial General Liability Insurance • Professional Liability Insurance • Employment Practices Liability Insurance • Cyber Liability Insurance • Inland Marine Insurance • Commercial Crime Policy  • Business Interruption Insurance

5. Business Owners Policy • Business owners policy (BOP)is a comprehensive package of the following policies:  • Commercial property provides coverage for your gallery’s property and equipment breakdowns.  • Commercial general liability covers personal and third-party bodily injury and property damage.  • Business interruption insurance includes lost business income due to damage to your gallery’s property.  

6. Workers Compensation Insurance • Workers compensation insurance insures the employees any injury or accidents that occur on-the-job by replacing lost income to the employees and covering their treatment charges.   • From painting the gallery to hanging art pieces and setting up sculptures and installations, employees of your gallery are vulnerable to certain risks and dangers.

7. Commercial Auto Insurance • In the event of an auto accident, commercial auto insuranceprovides coverage for third party claims on bodily injury or damage of property.   • Whether you use vehicles to see and inspect potential artwork in different galleries or to meet a potential artist, buyer, or seller, this policy protects you and your covered vehicle in the event of an accident.   

8. Commercial Property Insurance • Commercial property insurance provides coverage to business-owned properties of your gallery for any disasters that don’t occur by nature. Some common perils included by this policy are:  • Vandalism  • Fire  • Explosion • In 2019, an art gallery in Florida caught fire and was burnt to the ground. • In such cases, commercial property insurance would cover the cost of renovations. 

9. Commercial General Liability Insurance • Commercial general liability (CGL) insurance covers third-party damages and claims which are caused by the operation of your gallery or within the premises of your gallery. The policy provides coverage for:  • Bodily injury  • Property damage  • Personal and advertising injury  • Medical payments • Defense against legal actions  • The average cost to restore a small painting can vary from $800 to $1000 and larger paintings can vary from $10,000 to $15,000.  •  In the event of a fire, the policy can cover the cost of replacement, compensation, or restoration for damaged artwork.  

10. Professional Liability Insurance • Professional liability insurance (PLI) helps protect your art gallery from any risks that may come with negligence in providing professional advice. PLI is an amalgamation of two insurance coverages:  • Errors and omissions (E&O) insurance:It provides coverage of legal liabilities that arise due to the business’ or employees’ negligence, malpractice, or errors.    • Directors and officers (D&O) insurance:It provides coverage for damages that result from the failure of the leaders of the organization to perform their duties.  

11. Employment Practice Liability Insurance • Employment practices liabilityinsurance provides coverage for any claims against the business for illegal practices such as  • Discrimination • Sexual harassment • Unjust termination • Example: You had to make a difficult decision to lay off an employee of your gallery. If the employee sues you for any of the above reasons, the EPLI will cover the charges for the defense.

12. Cyber Liability Insurance • The fastest growing crime is cybercrime, estimating the cost of the liability to be $6 trillion annually by 2021.  • Covering vulnerabilities, losses, and damages caused by data breaches and malicious hacking, cyber liability insurance might be a policy for your business.  • The payment information of your clients to the dealers on your gallery’s computer is susceptible to cyber-attacks.

13. Inland Marine Insurance • Inland marine insurance is a property insurance policy that provides coverage for property in transit on land. • Cargo is a risky business, and when it comes to art in transit, it could get pretty messy. • A Swissair jet crashed in water that lost currency, diamonds and jewelry that was on board along with a Pablo Picasso painting. • A comprehensive commercial cargo policy insures all types of transit: land, air and sea. 

14. Business Interruption Insurance • A research found that 55% of the galleries make less than $200,000 per year while 30% were in loss.  • Art galleries are susceptible to risks such as fire and explosions, you may lose out on some revenue after such disasters. • Art gallery owners can get business interruption insurancefor the loss of income after a disaster or incident interrupt their work. 

15. How much will art gallery insurance cost you? There are a few aspects that may affect the cost of your art gallery insurance, such as:  • Location of the gallery  • Size of the collection  • Security  • Type of artwork  • Sales