Many collectors and art professionals think of insurers as the people to call after an accident or disaster has occurred. But prevention is better than cure, as they say, and art insurance should not be all about the claim. For collectors and anyone else who owns or stores fine art, insurance companies can offer valuable guidance on pre-disaster due diligence to mitigate or even eliminate risks to a collection. “That is probably the most common misconception about insurance,” Matt Sweitzer, head of fine art and collectibles at Private Client Select Insurance Services (PCS), told Observer, explaining that the company’s offerings go well beyond those of a conventional insurance company—something particularly important for high-net-worth collectors because artworks are unique and irreplaceable. “Our preference is always to prevent the loss. Some are not preventable, but many are, and we prefer that clients engage with us early because we want to use the knowledge we have gathered over the years to help them protect their art.”
PCS maintains a vetted network of trusted storage providers, appraisers, conservators, collection managers and art advisors with which it can connect clients before an emergency happens. “It can be difficult to know who is best, who specializes in a particular type of art and who can properly handle a specific collection,” according to Sweitzer. “We have spoken with these professionals, vetted them, worked with them and built relationships with them. We have a robust vendor database that is available to our clients when they need advice.”
Effective prevention requires looking at both the collection and the property in which it is displayed. PCS insures homes as well as art, allowing its risk-management teams to assess the building, the collection and the relationship between the two. To assess the level of risk and advise on the most appropriate risk-management strategy, the art services team visits sites, interviews collectors and collection managers and reviews the procedures in place to safeguard works. During such visits, experts evaluate everything from environmental exposure and installation methods to household maintenance practices and staff training and awareness.
Another factor PCS considers is medium—something that is often overlooked, Sweitzer noted, but extremely relevant, especially in the ultra-contemporary market, where artists may use much more fragile materials. “It is important to understand how to behave around specific pieces because even a slight movement can cause damage.”
Following this risk assessment, the team provides a report with a list of recommendations that the client can implement. Sweitzer emphasized that the advice is specific to both the collection and the region. A collection in Aspen faces a very different set of risks from one in Florida. “Every unique characteristic of a collection and its location informs our recommendations for protecting it,” he said. The increasing frequency and severity of climate-related events have made this geographic analysis more urgent. Understanding climate risk is one of the biggest challenges facing art insurance companies today, he added. “It is clearly changing. Severe events are becoming more frequent, and this is not limited to one location. It is happening across the country, although the type of risk differs depending on where you are. Understanding how catastrophic risks are increasing influences the way we protect art.”
The evolution of wildfire planning over the past few years illustrates how quickly established protocols can become outdated. Five years ago, art insurers often adapted hurricane evacuation strategies to California: when a fire approached, specialists would remove the art and move it to secure storage. But recent wildfires have shown that access to a property can be obstructed very quickly. “If a fire cuts off the only road in and out, you can no longer remove the collection,” Sweitzer said. “The evacuation plan you created may suddenly become irrelevant,” which forced insurers to change their approach. Today, insurers advise collectors in wildfire zones to establish advance contracts with qualified art shippers. “When fires occur, everyone wants the same resources. Without a preexisting agreement, you may not be able to secure them.”
At the same time, insurers are increasingly developing shelter-in-place strategies involving fire-safe rooms or underground bunkers. Moving every piece within an acceptable time frame might be impossible, but collectors can plan for a small number of top-valued works that may represent roughly 80 percent of the collection’s value to be safeguarded on site. PCS helps clients identify those works, assign responsibility for each one, determine exactly where each piece goes in the fire-safe room and create a plan for moving them there before evacuating.
Sweitzer acknowledged that a conventional safe or panic room may not be sufficient. Even when smoke is excluded, extreme heat can damage sensitive art, heirlooms and collectibles. A truly protective room must withstand fire, smoke and heat while maintaining conditions suitable for each object inside. The gold standard is an underground bunker, but that is not realistic for everyone, and PCS has a list of alternatives at the ready.
Any plan must also account for the size and mobility of the works, the time required to move them and whether household staff can handle them safely. “There are many factors that cannot be addressed once a fire has already begun. The plan has to be created in advance,” Sweitzer said. After working with PCS to put a plan in place, some clients will rehearse their evacuation or emergency procedures so that they know how long each step takes, who is responsible for what and what the intended result is.
That, to Sweitzer, is the best-case scenario, and he was quick to state that proactive, pre-disaster due diligence can even lower premiums. “From an insurance perspective, a client willing to do that represents the best possible risk. We can say this is a responsible client. They have a plan, and they have practiced it. That client will probably receive a lower rate than someone who has not done this work.”
Variability is high across the board, however. Wildfire risk, for example, can vary between two homes on the same Aspen mountain, depending on dryness, vegetation and exposure. It is precisely for this reason that community-wide measures such as prescribed burns, brush clearing and fire-conscious landscaping can be extremely important. Wildfires do not respect property lines, and embers can travel more than a mile. A single unprepared property can increase the risk to an entire neighborhood, which is why insurers also work with local governments and speak at art fairs and community events to raise awareness that prevention is everyone’s responsibility.
Museum loans are another area in which clients can benefit from consulting insurers early, before a loan contract is signed. “Before a work is lent, we want to understand the risk-management practices at the borrowing institution,” Sweitzer said. By reviewing the protocols of different museums, insurers can compare them and advise clients on requirements they may want to add to limit risk. “Loan contracts are very important because they determine who is responsible for what.”
Major museums often have emergency plans for natural disasters, theft and other threats in place, along with camera surveillance, guards, bag checks and restrictions on food and beverages. These are all risk mitigation strategies clients should look for and request before signing a loan agreement. “We prefer our clients to lend to museums that take these issues seriously. We ask many questions, and one thing we wish clients would do more often is come to us before they agree to a loan.”
Before approving a loan, a collector should understand who is responsible for transit, what shipping protocols will be used, how the work will be protected in the gallery and what security will remain in place after the museum closes. The insurer can review these questions and the allocation of responsibility in the loan agreement with the collector’s legal advisors. “If a collector is excited to participate in an exhibition, we want that to happen. We believe collectors should share their art with the world. They are its stewards, and we want the work displayed. We want to make sure the art meets at least a minimum standard of protection and, ideally, is protected in a way that substantially reduces the likelihood of damage,” Sweitzer explained.
Transit, he added, remains one of the most consistent sources of art claims. A fragile object in motion is inherently more exposed than one in a controlled environment, but many transit losses can be reduced through custom crates, specialized art shippers, before-and-after condition reports, route planning, tracking and security. Condition reports should be completed before and after transit so that everyone can determine whether the work arrived without damage.
High-value shipments may require escorts, and stops along a route deserve particular scrutiny. Sweitzer warned that thieves have stolen trucks while drivers were briefly away. A transit plan should therefore identify where the vehicle will stop and what security will be in place at each point. “These are circumstances collectors may not anticipate, but we can advise them on the appropriate protocols.”
Another significant category of claims, he said, involves preventable household mistakes. Ultra-contemporary art may incorporate fragile, unconventional or apparently functional materials, making it difficult for household staff or visitors to recognize what requires special treatment. Works may be damaged when someone leans an object against them, cleans them with inappropriate chemicals or uses an artistic piece for its original household purpose. Staff training is therefore an essential component of collection care. “Someone may lean an object against a work and damage it, or use a cleaning chemical on a piece that reacts badly with the material. Household staff need to understand how to work around the collection.”
The same principle applies to ultraviolet exposure, humidity control and UV protection on windows. Hanging a work over a fireplace and then using that fireplace can create an avoidable risk. “These mistakes occur because people do not necessarily know what precautions are required,” Sweitzer said. “And they are preventable.”
Newly available technologies are also expanding the possibilities for risk assessment and prevention. Still, Sweitzer admitted that the art industry still lags behind other sectors. “Some collections are still managed through basic Excel spreadsheets, and many still rely on policies that have never been updated and continue to list original purchase prices,” he said. Yet new A.I.-powered databases and collection-management systems can convert receipts and other unstructured records into usable collection data, track values over time and compare artists, periods, materials and dimensions with current market information.
Most of these systems can also record each item’s location, track loans and generate reminders when an item is due to be returned. “If 10 pieces are out on loan, a collector without a strong system may eventually lose track of one. Digital tools can create reminders showing that a work is on loan for a defined period at a particular location,” Sweitzer explained. Physical tracking devices can also help locate stolen art and are particularly useful during transit.
Accurate, up-to-date data about a collection benefits both the collector and their fine art insurer. The more complete and current the record is, the clearer the picture of risk, which supports more accurate pricing and may help identify opportunities for more favorable premiums. “Insurers are likely to offer credits or lower premiums to clients who can present a complete and accurate picture of the collection,” he said. “If I understand where the art is, whether its values are current and how it is being managed, I am more comfortable than I would be if I had no idea where the works were or whether they were overinsured or underinsured. Better information allows us to price more accurately and makes us more comfortable offering reductions.”
Still, fully predictive analytics are not yet reliable for art insurance because the underlying data remains too inconsistent, Sweitzer acknowledged. Predictive analytics are used heavily in automobile insurance because insurers have years of reliable data on driver age, mileage and driving behavior. Apps can literally record how someone drives. That level of consistent, real-time data does not yet exist for art, making comparable modeling difficult.
Sweitzer nevertheless expects A.I. to change that. For instance, more granular data systems could categorize a collection by medium, material, period, fragility and location rather than treating all collections as broadly equivalent. “A collection dominated by ceramics or glass presents a different risk from one dominated by more stable objects, but that distinction is not fully reflected today because the data are not strong enough. A.I.-enabled systems could identify that a collection is, for example, 25 percent oil on canvas and 60 percent fragile metal, and that should affect the way the risk is understood. A group of Old Master paintings that have already survived for centuries may represent a more stable risk and should potentially be priced differently.”
Insurers already assess broad distribution, for example what percentage of a collection is in storage, in Florida or in New York. But the more granular data they can obtain, the more useful predictive analytics can become, Sweitzer reiterated. “We can then identify which collections represent higher or weaker risks and, more importantly, determine how to improve the weaker ones. That is where the most valuable advice emerges.”
The ultimate purpose of fine art insurance is to protect works, ensuring they can be shared for generations. “Collectors are stewards of art: they are responsible for collecting it, managing it and making it available to others. These systems support that responsibility,” Sweitzer concluded.
