Underwriting fine art is about appreciating the value of what can’t be replaced while still understanding the practical measures needed for preserving the quality of any given piece.
Art historian, Iris Handke who works as an underwriter and Canada manager for the world’s largest art insurance specialist, AXA Art, explained “you can’t buy it by the dozen.”
“We’re talking about a special thing we’re insuring…it’s just not normal content,” Handke said. “We’re usually talking about a unique piece or a piece of historical significance, a piece where the owner or the collector puts a lot of time into finding it.”
Cultural significance, like a painting signifying when an artist evolved from one style to another, plays into an artwork’s value and insurance but not its’ underwriting, Handke said.
The Getty Trust developed a standard for describing cultural artifacts and artworks called Object ID that insurers use to classify the works they cover.
Object ID’s origins are rooted in an attempt to assist organizations like UNESCO in stifling the black market for cultural works and stolen art.
Security of the gallery itself, including alarm systems and surveillance, is one of the chief issues Handke examines.
But art thieves aren’t the only risk posed against priceless portrayals.
There is a plethora of factors fine art underwriters examine, all meant to keep the work safe and, the more contemporary the piece, Handke said, the more examination it needs because of the myriad of materials modern art uses.
“Say something is in storage, we check if the facility is climatized, because a change in temperature or humidity can damage the work,” Handke said. “We once had a problem with a wood sculpture and the storage facility wasn’t climatized and it was a very hard winter… and the wood just burst.”
Handke also warns against hanging watercolour paintings next to indoor pools because of the humidity.
Along with storage conditions, the complexities of transportation also play into the art underwriter’s role.
“You should probably use a company that specializes in art shipping,” Handke said. “And when you point it out, people say ‘Oh yeah, right!’”
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