University Business October 2017 - 60

PROFESSIONAL OPINION

The art of insuring fine art at universities
5 steps to protecting an institution's treasures
By Anne Rappa

U

niversities are home to some
of the most prestigious art
collections in the world, so
administrators should be prepared in
case an unforeseen incident occurs.
Creating a fine art insurance program
can help protect your university's treasures for generations-and getting
started is easier than you may think.
Consider these five steps:
1. Identify the property to be insured.
A broad fine art insurance policy can
cover works of art, natural history
collections and scientific objects, and
historical and archaeological artifacts. It
can also cover the technical equipment
needed to run an exhibition, such as
video monitors and projectors, as well as
registration papers and records.
2. Identify where fine art is located.
The next step is locating all of the works
of art on campus. While the art museum is a no-brainer, look carefully for
works displayed in less obvious departments as well.
An insured party must maintain
adequate records. Underwriters require a
review of the highest-valued works from
collection records housed in primary
campus locations. To protect the university from risk of loss, these collections
should be periodically inventoried and
the records updated for accuracy. Department heads can help in this process
by identifying and providing values for
their collections.

UBmag.me/art

60 | October 2017

3. Assess the value of the university's
collection.
A proper appraisal helps determine appropriate insurance limits, which are
typically calculated by determining the
worst possible scenario, such as complete
destruction of a collection.

A proper appraisal helps
determine appropriate
insurance limits, which
are typically calculated
by determining the worst
possible scenario, such as
complete destruction
of a collection.
4. Add risk control measures.
Your Probable Maximum Loss helps
you evaluate a wide range of risk-control
and risk-transfer measures to determine what is within your control and
what can therefore be managed by appropriate procedures or investment in
equipment. Likewise, determine what is
outside your control and requires you to
accommodate those exposures, and put
proactive and reactive measures in place.
Next, devise a checklist to include:
* location
* staff
* facility
* security
* fire
* environment
* IT
* collection
At the end of this exercise, which you
should conduct annually, your institution should have greater insight into

its overall risk profile and available risk
transfer/loss prevention strategies.
5. Procure fine art insurance.
Every few years, put your university's
insurance out to bid to ensure the best
possible coverage at the best possible
price. An insurance broker who specializes in fine art coverage can help in
this process. Their specialists, working
closely with your staff, can design a
plan that responds to your university's
specific requirements.
Policy features to consider:
* All-risk coverage. All possible
risks of loss are covered, with the exception of standard exclusions such as wear
and tear, inherent vice, war, nuclear
disaster, and loss sustained during the
repair, restoration or retouching process.
* Property insured. This option
should include everything listed in step
1. It should provide the broadest coverage available, and should include permanent collections and temporary loans.
* Schedules and blankets. You have
two options for the coverage amounts
on the university's fire arts. Scheduled
items are insured individually on a
schedule that becomes a part of the
policy. A blanket approach places an insurance limit on all items at a location.
* Worldwide territory. The policy
should pay for loss or damage to fine
art/objects at your permanent collection,
those on loan to others and on loan to
you, as well as works in storage, in transit or on tour worldwide.
Anne Rappa is senior vice president at
Huntington T. Block insurance agency. She
has more than 23 years' experience in the fine
art insurance field.
www.universitybusiness.com


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Table of Contents for the Digital Edition of University Business October 2017

University Business October 2017 - Cover1
University Business October 2017 - Cover2
University Business October 2017 - 1
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