Marketing Mondays: Studio Insurance

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Let me start out by saying that what I learned about studio insurance I learned through my own experience, which is limited. Is this true for you, too? Perhaps by putting our heads together we can provide one another with the information we need. Consider this a forum on the topic.

An ad for art insurance. I'm not picking on this specific company.--it happened to be the page I clipped from Art News--but what's not covered is instructive, per my highlighting. See any mention of art in the studio? (Detail farther down the post)

I had studios in Manhattan for close to two decades. For the place I was in the longest, an artists' building in Union Square, I had studio insurance to cover art and equipment. At first I paid $1000 a year for $100k worth or coverage. It seemed like a lot, but I had a lot to lose, so I paid the premium. After all there were other artists in the building, and in some of those studios there were solvents, torches, potentially flammable ink or rags and who knows what else. I myself was melting and fusing wax, though I set up a system whereby when the last light was turned out in the studio, all the electricity was off. 

One year, when I got the bill, I was startled to see that while the premium remained the same, the coverage had been cut in half. I called around, but mine seemed to be the only carrier who even offered studio insurance. I paid the premium. When I relocated the studio, I looked for better coverage. Guess what? Not even the carrier I'd had (Firemans, maybe; I forget, because there were several carriers over the years that had handed off the policy) wanted to renew it. Never mind that I'd made no claims in over a decade --and paid well over $10,000 in premiums.

No carrier, it seems, wants to cover art in the studio. Sure, as the Huntington Block ad above illustrates, they're willing to cover art in the galleries, in museums, in collections, in art fairs, even in transit, but no one seems to be concerned about the art in the studio.  In 30 years I have been very lucky: no disasters and only one break in, in which the only things stolen were a boom box and a dust buster, which I probably could have retrieved on St. Marks Place for a couple of bucks.

Insure the eggs, but let the chickens fend for themselves?

So now my studio has no insurance, though my situation has changed. I bought a building, a one-time auto-repair shop, outside of Manhattan. I work on the ground floor, have an apartment upstairs. My building's insurance covers everything in the studio but the art. I've resolved this situation by having as little art in the studio as possible at any one time. Each dealer I work with has an inventory of my work--and insurance to cover it. I make sure I have an up-to-date consignment sheet with each dealer, generating my own if the dealer does not. I've also made my studio as theft-proof, fire-proof and flood-proof as possible. A recent small leak--rain seeping through snowpack, with nowhere for the water to go but through the foundation and onto the concrete floor of my studio--reminded me that everything on the concrete floor needs to be raised up several inches.

I’ve thought about attaching a non-discountable "insurance fee" to the sale price of each work, to either pay for a rider to cover work in the studio, which would have to be documented and appraised, or to cover my butt if there's a loss.

I asked Edward Winkleman, the New York City dealer and author of How to Start and Run a Commercial Gallery, what he thinks of the idea.  “I understand the impulse but I’m not sure it will fly," he said in an e-mail response. "Dealers already consider insurance what comes out of their 50% (i.e., cost of doing business) and may expect the same to be true for artists. It could open the gate for a wider range of non-discountable costs. (What's next? the dealers may ask...rent and materials off the top?).” 

Moreover, says Winkleman, there’s getting collectors to understand and accept the surcharge. “ Framing and other such production costs are easy (you can show them the invoices from the framer or give them the option to have it framed themselves) and you note on the price list that the framing is extra, but the more complicated a sale gets, the more they'll balk (buying art for them is meant to be pleasurable, not work).”

Another dealer, who asked to remain anonymous, suggests skipping the surcharge. "It will create confusion, extra paperwork, and too much explaining. Better to just add  seven or eight percent  to your prices if you feel the need."

Over to you:
. Do you have studio separate from your home? Do you have insurance for the studio?
. Do you have a studio in your home? How are you covered?
. Have you ever had a loss? Did your insurance cover it?
. Has anyone had a carrier refuse to cover a documented loss?
. What measures, if any, do you take to ensure that your studio is as safe as it can be?
. If you have insurance, who is your carrier? Please share as much (terms, fee) as you feel comfortable sharing
. Anything else you wish to add to this discussion?