How to protect a high-value art collection

Artwork can take many forms, from paintings and drawings to sculptures and ceramics. For any of these forms and more, high net worth insurance, and good risk management can help your clients protect their valuable artwork.

As part of its niche insurance offering, the Mansions Executive Insurance PDS provides prestige cover for artworks under the contents section of the policy.

"In addition to that, there's private collections cover, which is an optional add-on and is designed for anyone who appreciates their art," Senior Technical Underwriter at Mansions of Australia Claire Niewiarowski explains.

She says that to take out the private collections cover, pieces don't necessarily have to be insured for a large sum.

"Some people don't decide to go down the route of specifying items, so we have clients whose collections are insured under the contents section of the policy," Claire says. "However, the private collections option is definitely superior, as it includes additional covers."

How to keep an art collection safe

Get art valued

Protecting an art collection includes getting works valued at least every five years, as the value of artwork can change.

In addition, Claire says clients should keep receipts for recent purchases, which might form part of a professional valuation.

It's also a good idea for your clients to photograph items so they have an inventory.

Store artwork correctly

Where and how works of art are displayed should also form part of any risk assessment, Claire says.

"Paintings and drawings are probably the most commonly insured artworks, and your clients have to be careful about hanging them in direct sunlight. They also need to be careful about hanging watercolours or drawings near a window as this can damage them," Claire says.

Hanging art above a fireplace, near a heater or air-conditioner, or in a bathroom or kitchen is also ill-advised due to the fluctuating temperatures.

"Ideally, humidity of about 50% and an ambient temperature of about 20 degrees is appropriate for most pieces."

It can also help to avoid the house's busiest areas to avoid bumps, or other risks of damage. If your client has children or pets, it's best to avoid displaying the art at a low height.

"I also wouldn't advise displaying anything valuable in a room located beneath a bathroom as a water leak has the potential to spread and cause damage to these items - that is probably one of the biggest causes of damage we see, along with accidental damage."

Other ways to help keep an art collection safe include:

• Employing an expert to hang art and ensure the fixings used don't cause any damage.
• Ensuring stored art is wrapped, kept off the ground and preferably not in a basement.
• Avoiding displaying bronze sculptures near indoor swimming pools.
• Ensuring anyone employed to clean artwork knows how to do so safely.
• Taking extra care of items when in transit.

The benefits of private collections insurance cover for artwork

The optional private collections cover includes a cover for newly acquired works.

"The Mansions Executive Insurance PDS gives cover for up to 90 days from the date an artwork is purchased to give the client time to let their broker know that a new piece of artwork needs to be included on their policy. If there was a loss during that period, it allows a bit of leeway if people are not completely on top of their admin.

The benefit pays up to 25% of the existing specified items sum insured for the item (up to a maximum of $100,000 for some items such as jewellery)."

Additional covers under the private collections option include incomplete fine arts cover in the event that a commissioned work is unable to be completed.

"For example, if the item is damaged while at the artist's studio, the PDS covers the costs, such as any materials and labour that the insured may be obliged to pay," Claire says.

Another benefit of the private collections option cover is that of defective title, provided the insured was a client of Mansions at the time the artwork in question was purchased.

"It covers out-of-pocket and legal costs if a client purchased an artwork in good faith but had to return or relinquish it because the seller didn't have a clear title or has a claim to the item that the client wasn't aware of."

For more information

Mansions Executive Insurance protects the assets, lifestyles, and financial wellbeing of individuals and families so they can confidently pursue their passions. For more information about our unique product and service, visit our website, call us on 1300 738 308 or email us at mansions@mansions.com.au.

This document is intended for insurance intermediaries only. The Mansions Executive Insurance Product Disclosure Statement is issued and underwritten by QBE Insurance (Australia) Limited (ABN 78 003 191 035, AFSL 239545) (QBE). SGUAS Pty Ltd t/as Mansions of Australia (ABN 15 096 726 895, AFSL 234437) (Mansions) is authorised to distribute this product on behalf of QBE acting under its own AFSL. Any information contained in this document is general advice only and has been prepared without taking into account your client’s objectives, financial situation or needs. Your client should read the Mansions Executive Insurance Product Disclosure Statement (PDS), Target Market Determination (TMD) and Financial Services Guide (FSG), which can be obtained by contacting Mansions on 1300 738 308 or visiting www.mansions.com.au before deciding to acquire, or to continue to hold this product.