Art Loss: The Nuances of Adjusting Art Insurance Claims

By nature, art insurance must mirror the complexity, value, emotion and qualities that the world of art holds. High value and irreplaceability are just the two obvious factors that complicate the process of insuring artworks. Beneath that there are potential layers of complexity that require a specialist’s touch, that’s where we come in as Loss Adjusters.

Assessing Value

  A deep understanding of market trends, specific bodies of work and art appraisal are key to assessment of value in artworks. Having close working relationships with art appraisers, curators and historians helps us to understand and determine accurately the value of pieces before and after loss occurs. Art from artists with well-established market presence can benefit from robust comparative market analysis, but for works from newer or living artists a cost-based valuation may be more beneficial. Value may also include income, as often pieces are licensed or charted for as a part of exhibitions.

History and provenance can significantly impact how we assess value. Well documented histories of ownership or place in collections can skyrocket the value of a piece and historical significance even more so. Works that have significant cultural impact are also valued higher than they may be out of context.

Sometimes given a lack of consideration in the handling of a loss is the physical condition of the insured item before incident. Previous damage or repairs can have significant impact on the value and should be considered by Loss Adjusters during the claims process.

Whilst it may seem to be a simple consideration, the rarity or desirability of a piece of art can have complex implications for value. Beyond market trends, it can be useful to consider current or historical social and cultural impact of an artist, specific work or movement. Whilst scarcity is a mostly static value in the case of artwork, desirability is fluid and heavily impactful on value.

 Damage and Restoration

  An understanding of the restoration process and the impact it has on the value of artwork is key to understanding how to deal with art claims. Clearly, the restoration process can differ greatly between pieces so a wide base of knowledge and access to specialists is key. Art restoration requires a precise and detailed approach, starting with an initial examination using specialised tools to understand both the composition of the work and the issues that have arisen from the damage. This inspection lays the groundwork for how to move forward and is arguably the most important step in the process.

From here, we may undertake a more forensic chemical analysis if appropriate, then cleaning and structural repairs can be made. If appropriate, filling and retouching may occur, looking to protect as much of the original piece as possible and making sure changes are reversible where possible. During these processes, we would look to stabilise and consolidate the artwork as much as possible, this is good for both the owner and the insurer and it looks to mitigate further degradation or damage.

Clearly, as insurance professionals, we would look to utilise our network of experts in the specific field relating to the individual loss to help us understand what this bespoke process should look like. Each claim needs to be given its own considerations as generalisations would be unhelpful to a successful outcome.

Once restoration is completed, we would look to put together a package of recommendations for potential preventative measures such as storage conditions or maintenance alongside a final adjustment and evaluation.

 Cultural and Emotional Impact

  Whilst adjusters should always work with a high degree of sensitivity to the insured and their loss, during art claims this becomes specifically important. Works of art have unique cultural value alongside the emotional value you may find in other sectors of insurance. At the same time as understanding and mitigating any emotional impact to the insured, it is key to contemplate the cultural impact of art that can reverberate through communities. This is unique to each individual artwork and must impact our handling of claims, as it informs our approaches to valuation, restoration and expediency.

It is entirely possible that any damage or theft can represent an irreplaceable loss to culture, heritage and legacy. Our role here is to work with reverence to the piece and the context it sat in, doing what we can to facilitate positive outcomes but also manage expectations. Being clear and open about the process with the insured helps us to maintain a smooth process for every party. Again, it is invaluable to work in collaboration with experts in relevant fields to help us navigate this potential minefield and make informed and respectful decisions.