Art theft and damage why insurance makes sense
Art Insurance is there to cover damage and theft, but a key question many art owners ask themselves is whether their art work is really at risk of being stolen or damaged?
Art theft is typically for
the purpose of resale; or
for ransom (sometimes called artnapping).
use by criminals as collateral to secure loans.
According to some reports, only a small percentage of stolen art is recovered estimates range from 5 to 10%.
One reason that art is a good target for theft is simple logistics. The valuable art pieces are worth allot of money but weigh only a few kilograms at most, with transport for the stolen items being relatively easy. For example, the thief could simply cut it off the frame and roll it up into a tube carrier.
Check out these sites:
National Stolen Art File (NSAF) you can do a general search and see details and pictures of stolen artwork reported to FBI. The NSAF is a computerized index of stolen art and cultural property as reported to the FBI by law enforcement agencies throughout the United States and the world.
http://www.fbi.gov/about-us/investigate/vc_majorthefts/arttheft/national-stolen-art-file
The ALR is the world’s largest private database of lost and stolen art, antiques and collectables. Its range of services includes item registration, search and recovery services to collectors, the art trade, insurers and worldwide law enforcement agencies.
In addition to theft, there is the ever present risk of being destroyed.
For example, thanks to Hurricane Sandy‘s devastation of New York’s waterfront galleries and studio spaces it’s been reported (Reuters report Dec 21 2012) that industry estimates suggest insurance losses for flooded galleries and ruined art may come to as much as $500 million the rough equivalent of what the art insurance takes in premium each year. This bill would probably be for the physical damage to the galleries themselves as well as art losses.
It wasn’t just that the properties were damaged. Many of the galleries lacked power for a while, and things that needed to be in a controlled environment were also affected.
Loss does happen. In the industry we refer to it as a low frequency (doesn’t happen often) but high severity (big number) event i.e. it doesn’t happen often but when it does its likely to be big. So it pays to be properly insured..