Some customers, including industry insiders, mistakenly believe that booking a service or shipment with a fine art provider means, by default, that the shipment or goods being handled are automatically insured. Or, if not insured per se, that the provider nonetheless must have liability in case of damage, especially damage caused in the course of their care and custody. Not the case. In fact if it were the case, art handlers could not function; having open ended liability for potentially millions of dollars of stored and in-transit property would be an untenable business proposition day to day. We have enough gray hair as it is.

So the reality is that fine art handlers necessarily have limited liability, typically capped at 60 cents per pound per article, for uninsured items. That is barely salvage value and completely useless in the realm of fine art coverage, where values range from hundreds into the millions of dollars. Beyond that point, unless a value is declared and a premium paid, there is no coverage. Zero. No matter what the circumstances of the loss. Even if we knock it off a shelf and run a forklift over it. We really try not to do that, by the way.

Every customer who calls to book a service or receive an estimate is asked if they wish to take or decline the insurance we provide, and every transaction processed – estimate, bill of lading, invoice – shows the status of the account or shipment as insured for a specified value or insurance declined. If you are working with a carrier or fine art shipper and there is no notice of insurance status on the document, get that fixed. If there is no value declared and shown in writing then chances are 99.9% that you are not insured with that provider.

Despite this clarity, some customers remain confused or subject to wishful thinking, typically after a loss has occurred. To banish this “gray area” insurance underwriters, including ours, have introduced an additional step into the process: customers declining insurance must sign and return an OPT OUT form, a sample of which is below.

The form is kept on file and applies to all transactions for that customer or account, unless or until rescinded in writing. In some cases a museum, collector or gallery will have their own all risk policy in place, and sending us proof of such coverage will serve the same purpose as the OPT OUT form.

Asking our customers to return this form has been instructive. It has turned up some who thought they were insured, despite receiving in some cases years of notices to the contrary, and others who realized their own independent coverage had lapsed and/or that they need to update their appraised values and coverage. Many clients had questions, which served to show that the waters were murky indeed. A few interpreted this to be an entirely new policy limiting our liability and were concerned that we were now cutting them off from some delectable free coverage they had enjoyed in the past– not the case. As I hastened to explain. And a few others thought the document somehow related to their own independent insurance policies, which it does not.

And so, unaccustomed as I am to praising insurance companies, my chapeau is off to the folks at Lloyd’s of London and our agent at Willis Fine Art & Specie for adding this document into the mix. Nobody likes more paperwork, but where irreplaceable art and artifacts are concerned the fewer twilight zones the better.

Betsy Dorfman

Sample notice:

NOTICE OF OPT OUT of insurance offered

This will confirm that I/We have been offered purchase of “Customers’ All Risk Fine Art Insurance” by Fine Art Shipping/Bilton Arts Inc. and that I/We OPT OUT and decline to accept this coverage.

By opting out and signing below I understand that Fine Art Shipping/Bilton Arts Inc. has limited liability for any loss or damage, as specified in their documents and waybills, as do their agents and affiliated providers.

( ) I/We decline to accept coverage as noted above and this relates to ALL SERVICES performed by Fine Art Shipping/Bilton Arts Inc. I/We further understand that this OPT OUT declination can only be rescinded by myself or an authorized representative and requires a statement of acceptance in writing from Fine Art Shipping/Bilton Arts Inc. to take effect.<

COMPANY or INDIVIDUAL NAME: _____________________

ADDRESS__________________________________________________________

SIGNATURE of individual or COMPANY authorized representative __________________________

DATE ______//_______//______

NOTE: Failure to return this document to Fine Art Shipping/Bilton Arts prior to performing the requested service will constitute acceptance of “Customers’ All Risk Insurance” together with any related fees and expenses for same.<