Marketing Mondays: Studio Insurance

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?


Gam said...

Hi Joanne,

Have you seen this list of art studio insurers? It's compiled by AHN. There are a couple of company's listed that apparently offer art studio insurance throughout the US. (Don't know their policies - if its for the art or space - although one does state it is for the art)


mariandioguardi.com said...

I do have a separate studio space and my lease requires studio insurance. It does not cover art work. Art work is exceedingly difficult to insure at a cost effective rate. For instance, the Gardner Museum art work is not insured. The pieces that were stolen, not covered. Many private collections put their money into tangible safety and precautionary measure such as alarms, locks, and documentation in the even of theft.
Even if one has insurance the reimbursement procedures are cumbersome and the insurance companies look for every excuse and reason to deny coverage or make in so minimal you wonder why you have insurance. I rather take money and put it aside for "an unforeseen event" than pay it into an insurance company.

Gam said...

I'll pass this on because it may be of value. It is an insurer that has studio and content insurance.


what is interesting is that the state (provincial) professional arts association has a group plan with this insurer that adds on a group rate the policies offered (15% discount). So others have faced your concern and as a group were able to make a market that was affordable to both parties.

Although they are Quebec based, (english translation button at top) that they already have a relationship with a professional arts organization may
mean that they might be open to discussion with other state level (or significant membership size) groups to expand their coverage internationally? Worth considering.

from their site ..."If these packages don’t suit your needs, please call for a made to measure solution: (514) 382-6677."

Christopher Pelley said...

Excellent post, Joanne! Your chicken and the egg analogy is a good one - I think the insurers' stance mirrors the IRS' stance. Artwork in posession of the artist has no value other than the cost of the materials involved. It appears that only when a 3rd party gets involved (art handlers, gallery consignment, death of the artist) that the commodity has market value and thus is taxable and insurable.

Nancy Natale said...

I do have insurance for my studio, mainly because it is required by the terms of my lease. I have business owner's liability coverage of $1 million for bodily injury and property damage liability and for personal and advertising injury liability. I have no idea what "advertising injury liability" is but it's standard. I also have $2 million for general aggregate limit (whatever that is) plus products and completed operations. I have $100,000 for any one fire or explosion and I have a max of $5000 per person for medical expenses. This policy is written by Patrons Mutual Insurance Company of Connecticut.

I also have a "Fine Art Floater" which covers "fine art" for a max of $10,000. This amount is a joke but it's better than nothing.

Wouldn't a reasonable person expect that "products and completed operations" would include finished art works? But, nooo, not according to the insurance agent.

My premium is $450 per year (because Bonnie and I also insure two cars through this insurance agent).

I have never had a claim against the policy and have been carrying it since I moved into the studio more than four years ago. I did have some minor damage once from a residential tenant two floors above me who left her bathtub running. She settled with me privately and it was not a big deal.

I had a hard time getting the extra floater and got a comparative quote from another agent that was a lot more expensive. Apparently the insurance companies do not want to believe that there is any value in art that has not already been purchased by someone - as if money, rather than the artist, is the magic element that turns it from studio materials into fine art.

If this insurance is anything like my home insurance, I think it is only useful for a real disaster. When we had some damage from a lightening strike that amounted to about $3500, the agent advised us not to make a claim for anything less than $8000 because it would not only mean that our rate would go up, but that they would cancel us.

It seems that they only like raking it in and not paying out - no surprise.

Alyson B. Stanfield said...

Thank you for initiating this discussion, Joanne. I think many artists mistakenly believe that their homeowners policy covers them if their studio is in their home. Not so. Artists need business insurance - for studio and for office.

I look forward to hearing what people say.

Gwendolyn Plunkett said...

Good topic, Joanne. My studio is a separate building on our property and our homeowners insurance has covered it for the past several years though not as a working studio business. When we inquired recently into upgrading the coverage because of my holding workshops there, I found out that in fact, I need a separate policy with a different company, since it is a considered a business.
I don't recall the exact cost per year (we are still thinking about it) but around $800 for the year. Plus, I also don't recall everything it covers. I was concerned with liability and had just given up on getting anything substantial for my inventoried art.

Jonathan Crook, AAI said...

I'm sure it's hard to believe with a name like this, that I actually broker insurance for businesses. :) ...trust me, I've heard every joke in the book 1,000 times!

I'm not a regular reader of the blog, and in fact was directed to it by a colleague this morning. Hopefully I can offer even a small amount of dialogue towards contribution to the discussion.

There are actually quite a number of insurance companies out there that will write coverage for art studios and galleries. For an artist, perhaps the most important part of any policy is to have a thorough understanding and clarification (preferably in writing) from their broker/agent and the insurance company as to how their artwork and the artwork of others is covered by their policy.

Artwork is of course an inherently different kind of possession and work than most other forms of 'personal property'. Each piece is often quite unique and irreplaceable. In almost all cases (except...), art is worth far more than the basic materials that are often used to create it (paint, canvas, clay,etc) and thus 'cost of replacement' is a challenging monetary figure to calculate in some cases. Desks, computers, copiers, chairs, filing cabinets, phones, etc are all often quite easily replaced with something exactly or quite nearly identical. Artwork is not the same.

If interested in including coverage for yours or others artwork (on consignment) on your studio policy, it is most important to have an open discussion with your insurance broker and provide them a schedule of you artwork to be insured and the value you would like to insure it for with a scheduled 'endorsement' or fine arts floater. In many cases insurance companies will ask for a thorough list of art pieces and values that they are to be insured for. Photos of the piece and appraised values are certainly helpful too.

Most insurance companies will have various underwriting/risk criteria to determine if they can offer a policy: condition of the building, protective safeguards in place, consideration for disposal of solvents/rags/potentially flammable materials, insurance history, value of property that coverage is being requested for, etc.

My contact information is listed on our company website if I can offer anyone individualized assistance or guidance.

Kind Regards

Jonathan Crook

Joanne Mattera said...

Hi, Jonathan--

Thanks for posting! I had a terrible time finding insurance for my artwork—even through my at-the-time insurance agent. What he told me was that I needed to have all my artwork appraised before we could go to the next step.

I can document the work in my personal collection (other artists' work and my own), and get it appraised if necessary, but the work in the studio is in constant flux. New work gets made and shipped out. Some older work returns, stays briefly and then goes out again. There’s always a turnover. I know where everything is, keeping track both in my head and via my digital files (which are backed up in cloud storage).

I will be back in touch with you this summer--when my schedule eases. Not only might I end up with insurance for the artwork in my studio, I will report on the process for my blog readers.

Susan Schwalb said...

I looked at Gam's list and I know the insurance company Huntington Block as I once insured a show in the 1980's through them that was at a coop gallery. Last time I contacted them insurance for my art in my studio or in transit was not something they covered. I have email Crook and will see what he really has to offer. I like all of you use a wing and a prayer when it comes to insurance of my work.

Jon Crook said...

I hope I can be of assistance. If not directly, I can at least point you in the right direction.

I'll certainly be interested to hear some of the prior issues you've had in acquiring coverage for your studios.

Victoria Webb said...

Thanks so much for posting this question - which prompted me to review my own insurance.

I recently moved back to Atlanta and switched homeowners. I asked that my policy (Travelers through Geico) add coverage for my paintings - I do have a studio in my home. My vehicle is also covered through Geico.

The agent added coverage up to $50,000, or $20,000 for any one item with an 'optional endorsement'. $50k for all my work isn't great, but I just spoke with an agent who informed me that I could add more coverage, so it appears they'll go beyond that limit.

The only hitch is that one must have a homeowners policy to add on the coverage. Not sure a studio alone would work. I also have temporary coverage while the work is being exhibited, but my storage space doesn't qualify since it's year round.

The other question is how the insurance company determines a painting's price point if it hasn't sold, but is damaged or stolen.

Joanne, I hope to meet you at your upcoming April show at Marcia Wood's gallery. I've been a fan of your blog and work for some time.

Lynette Haggard said...

I held studio insurance for over 10 years because my lease required it and I am a "doobie". I spent an average of $1000/year. A few years ago I needed to cut expenses so I dropped it. (I also had discovered that only 3 out of 15 artists in my group had carried insurance.)

For a few years, I was also freelancing as a graphic designer out of my studio with expensive computer and scanning equipment on premise. Also had artwork inventory stored. So I increased the policy then to cover inventory and materials. Let's just say the insurance company isn't pursuing me now that I cancelled the polic.

Fortunately, I have never made a claim.
I have decided not to carry insurance in my studio and to store my inventory at home. At least for the time being.

Leslie said...

My studio is in my home. I carry a separate "inland marine" policy (don't know why it's called that) which covers materials, equipment, work in transit and some limited amount of coverage for finished work with the set of caveats about documenting value of work in order to file a claim. It's a quite inexpensive policy tied to my homeowner's policy with State Farm. Frankly I think it would do fine on replacing the non-art contents of my studio - materials, furnishings, large format printer etc, and be less useful for my work. But certainly far better than nothing! I've never had a claim on this policy but State Farm has paid promptly and fully on both car and homeowner's claims without jacking rates on us for more than 20 years.

Delilah said...

I have been trying to find insurance for a 3 week exhibition that I am doing with no luck. Any ideas on who to call?

William said...

I am a Insurance broker here in New York City, who sells a lot of art insurance to Artist. My Website is www.ArtInsuranceNow.com My wife, Grimanesa Amoros, is an artist and has exhibitions throughout the world. Her inventory in the studio varies but the values run constant. I represent a Carrier who will insure your art work, while in the studio, in transit and away at exhibitions. The company does not need schedules or any type of appraisals.
As long as the art work is for sale, there is coverage. The value is determined as follows: Sale price minus 30% (art must be for sale) or sold items at full sale price. The sale price is checked base on previous sales, no over-inflating is allowed.
I have written policies starting @ $1,200 annual, just did one for $1,684.00 for $250,000, in studio, while in transit and away at unnamed locations with a $1,000 deductible.
As for liability Insurance there is a slew of them,and easy to find.
I like to work with Artist, no I love to work with artist so much I married one.

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Anonymous said...

I am in the Chicago area and need proof of insurance for 4 paintings going to an art fair in LA. I am sending them to a freight forwarder by UPS or FedEx but I think for shipping I have to put a minimal value or they won't ship them. The value of the art work doesn't justify an art shipper because it would cost more than I would make. I'm obliged to insure the work for the art fair though. My main question is who will insure 4 artworks for this art fair without my getting costly appraisals. My work is sold in galleries.