Did you know that if your art is damaged or lost while in transit to your home, an auction house, or elsewhere, the standard reimbursement rate is not based on the value of the art; but rather, it is typically based on weight of the artwork, at a rate that is typically $.60 cents per pound? This means that, if your artwork weighs only 5 lbs., you are running the risk of receiving $3.00 for your $3,000,000 lost or damaged artwork! Many people do not know this, and focus only on the transportation charge (thinking all carriers are the same), so high value items are often underinsured and at risk while in transit.
There are many reasons to transport fine art—perhaps you are moving, moving a piece of art from one home to another, making arrangements to receive art that you have recently inherited, lending a piece of art to museum for exhibition, or sending art to an auction house for sale or to a gallery for sale or restoration.
Regardless of why you decide to ship your art, you may be surprised to find that it is often your responsibility to arrange for its transportation. For example, if you decide to sell art through an auction house, you will typically be responsible for facilitating the transportation of your art to or from the auction house, though the auction house may recommend certain preferred providers or even offer its own insurance.
The terms under which your artwork will be transported, as well as the terms under which your art will be publicly displayed are often complex and should be reviewed by counsel. Using a carrier or logistics provider that specializes in fine art can help to reduce or avoid certain risk factors; however, accidents happen even with the utmost care. Items can be damaged (or even stolen) during collection, transportation and delivery. Natural disasters can occur, or unexpected problems can occur on the road.
Fine Art Transit Insurance (which also may be referred to as Shipping or Transportation Insurance), protects your art, and eliminates the worry and risk of having to recover your loss or damage under the complex terms established by the carrier transporting your goods and a federal statute called the Carmack Amendment (or the Carriage of Goods by Sea Act or Montreal Convention in the case of international shipments). Different types of coverages are available, including comprehensive, named peril, and all-risk coverage. For valuable fine art, it is crucial to select a policy that provides adequate coverage and has a clearly defined transit limit. Coverage is available for art that is in transit (from origin to destination, nail-to-nail, or wall-to-wall), newly acquired pieces being transported from a seller or art gallery to the buyer, pieces that are being stored while in transit, and pieces that are on tour at exhibitions or events such as art fairs. This type of coverage may be bundled with a larger Fine Art and Collectibles Insurance Policy.
Of course, a recent appraisal of the art being transported is important, as any insurance coverage you purchase will be tied to it. In fact, your insurance company may want to do its own appraisal. If the artwork has been recently purchased, you may also be able to establish its value for insurance purposes by presenting a bill of sale to your insurer.
Another option is to purchase full value protection from the carrier transporting your goods (or an intermediary like an auction house or logistics provider). However, this protection requires strict adherence to specifically-stated requirements in the carrier’s terms and conditions, and it often comes at a higher cost than insuring separately.
If you do happen to receive a damaged art shipment, promptly photograph it and otherwise thoroughly document the damage at the time of delivery. Make careful note on the bill of lading of any sign that the shipment was mishandled or improperly packed, or if any artwork appears to be missing. Promptly contact the carrier, broker (if any), and your insurance carrier to report the loss or damage and make a claim. You may also wish to engage experienced counsel to help you navigate the claims process and protect your interests.
How Can We Help?
At Flaster Greenberg, our transportation law attorneys can assist you with the necessary review of the terms and conditions associated with the transportation and storage of your art to make sure you are properly protected. With artwork of higher value, we can help prepare custom-tailored agreements for your unique situation.
Our insurance coverage attorneys can refer you to an insurance broker who specializes in the insurance of fine art and antiques. We can also assist you in reviewing your insurance policies and making suggestions as to what coverages would be best to protect your art.
Our tax and estate attorneys can also help you maximize the tax benefits available to you with regard to any art or antiques that you may wish to donate or incorporate into your estate planning.
