Insuring the Fine Works of Art You Buy Online
Posted: Jan 12, 2021
Online transactions worldwide increased due to the pandemic. Thus, today, you can purchase almost everything from e-commerce sites, including fine artworks. Online galleries may sell limited edition reproductions of works of the masters and carry a large portfolio of works by established and budding artists in a wide range of themes and art styles. You can choose from paintings, graphic arts, sculpture, and photography in a host of media.
If you are a fine art collector now interested in buying artworks online, one of the vital things to consider is insurance.
Art collectors and dealers should be aware of the various risks that accompany online transactions, and when purchasing artworks, the investment is sizeable, so the risk is higher.
When you buy art online, whether from other collectors, galleries, auction houses, dealers, and artists, each one is exposed to fraud. According to art insurers, collectors have to ensure that the art seller has an extensive cyber insurance policy.
What is a cyber insurance policy?
A cyber insurance policy sees that an artwork seller has followed the required steps to protect their business against a possible breach, with back up servers and firewalls. Aside from the software and related technology, the seller and the customer should ensure that they are thorough and careful when doing online transactions by asking the right questions and doing the necessary research.
It is critical to ensure that the cyber insurance policy handles your requirements, such as covering your art inventory in and out of your company, the method of evaluating the cost at the time of loss, and online transit coverage.
The policies vary depending on legal jurisdictions. In the state of New York, you should follow the SHIELD Act (Stop Hacks and Improve Electronic Data Security). This Act requires all employers to have a security plan for vendor accounts, networks and computers. Ensure that the dealer has all the right security against breaches, approved data security certificates for their website, and separate bank wire accounts.
Other types of art insurance
Aside from the Certificate of Authenticity that accompanies the artwork you bought online, which verifies the work's legitimacy, you should also insure your art collection from theft and other untoward incidents.
Your home insurance will not cover a fine art collection. What you need is separate fine art insurance, which is more detailed and comprehensive. The policy will protect the art collection and help you make art insurance claims.
But since not all art insurance policies are the same, you should check all the inclusions, such as restoration, especially for precious artworks. If you own a masterpiece that you lend to a museum or gallery for a special exhibition, make sure that you have a door-to-door insurance policy, which will cover the precious artwork from the time it leaves your home, while in transit and until it's returned to you.
Prepare all the necessary documents related to the work of art and proof that the artwork belongs to you, such as the bill of sale, proof of ownership, provenance, and photographs of the artwork, most recent appraisal and replacement estimate. Storing all necessary documents in the cloud is another way of to protect your documents and have ready access to them.
Schedule a regular appraisal, usually annually, although the frequency will depend on fine art's medium and age. See to it that you inform the appraiser that you need the appraisal for insurance to get the most up to date market value.
An art collection is difficult to replace, so whether you buy your fine artworks online or from onsite galleries, make sure you provide them insurance from the purchase time until they are in your possession.
With extensive research and study, Simon passionately creates blogs on divergent topics. His writings are unique and utterly grasping owing to his dedication in researching for distinctive topics.