Insurance for fine artists
Tony Wypkema
art on consignment at art galleries?
I'm dealing with a gallery that says in its contract that it provides
fire and earthquake insurance, but artists are expected to provide theri
own theft insurance.
There is no mention in the contract of other kinds of coverage, such as
flood, mishandling, misplacing, etcetera. There is also no mention of
what percentage of the wholesale value of the art on consignment that
will be covered in the event of a fire or earthquake, and when such
payments would be made, so there are lots of loopholes the gallery and
insurance company can use to avoid paying the artists in the event of a
catastrophe, from what I can tell.
Thank you.
Tony Wypkema
Jim Leonard
Tony:
It's hard to give you solid advice while not knowing the nature your
work (do you do installations vs. ceramic mugs), your current career
standing (ie are you just starting out vs. being a hot item with a good
deal of negotiating power), the nature of the gallery (is it an
alternative space? a coffee house? or a retail gallery?), and the
status of the gallery.
That said though, first bit of advice: Contracts. Remember these are
always negotiable. This is where some of the "status" elements come
in. What sort of bargaining power do both parties have? (The parties in
this case are you and the gallery.) How much do they need you? How
much do you need them? If this deal sounds too sour, can you do
business elsewhere? Or is this THE gallery to be involved with?
Also remember that once signed a contract can be Binding with a capital
B. If you can afford it, it might be in your best interest to hire an
attorney for an hour or two of consultation. You might not do this for
JUST this contract, but rather to cover the basics of your legal rights
where you live and do business and what language to look for in the
contract. (Plus, looking at your e-mail address, I'm not sure what
country you're in. Remember, laws and rights vary from government to
government. My experiences are as an American artist functioning in the
U.S. and on a few occaisons abroad.)
The fact that your work is being sold on consignment only gives me
little sense of your situation. I have encountered rather elite and
well respected galleries that sell work only on consignment (especially
any new genres work). Likewise, I know of several coffee shops in my
neighborhood that run a similar arrangement of sale on consignment. One
might assume that the well respected gallery would do its best to
protect its assets. One of which is the longevity of their
relationships with the artists it represents--especially because this
work is on consignment and is not already in their inventory of retail
merchandise!
Now the reason I brought up the nature of your work is this: I know that
some sorts of work are more readably insurable than others (at least
here in the states). For example, if you are a painter who makes unique
paintings, all of which are uniquely priced...as the artist, you will
NEVER be able to insure those works against theft. The risk of fraud
and the inability to place "accurate" value just make it an unreasonable
business venture for insurance companies. However, there do exist very
expensive specialized insurance policies for COLLECTED works.
But let's say for argument sake that you aren't a painter. You are a
ceramicist. And you make mugs, vases, and bowls. And though all of
these works hold artistic great artistic value, you actually have a
proper stock inventory. Your mugs are always $15 each; the large vases
go for $25, small $18; and three sizes of bowls go for $10, $12, and $16
respectively. Though this inventory my never rival the local kitchen
wares outlet, it is for all intents and purposes a wholesale
inventory...and though you are an artist...you may be able to get small
business insurance as a "manufacturer" and cover your inventory. Of
course this will mean that you need to keep strict books so as to show
your losses (if and when the occur) to the insurance investigators.
Now, if you are a new media artist and are utilizing media equipment in
an installation such as a video projector and two laserdisc players, it
is possible to get this gear insured for its REPLACEMENT value.
Personally, I've found the cheapest way to do this is to get a small
business property "stretch" for the $ value (or more) of this gear put
on your own small business policy. This is actually a cheaper and
usually more reasonable route than getting a full-on "floater" policy
for media gear. Floaters are meant for gear that will truly be floating
most the time, like cameras and recording equipment. They are good for
freeing your conscience and allowing you to be more willing to risk you
gear to make your work. I.E., you might lean out over that bridge to
snap that photo. With a floater, if you drop that $1500 120mm camera,
you can get the replacement value by making the claim. Of course all
policies, unless you pay a ton, have a deductable of $100-$300 usually.
This means you cover the first bit of the loss up to the max of the
deductable. Last word on insuring gear--ALWAYS insure for REPLACEMENT
value--not "fair market" or "depreciated value." $400 for that $1500
camera AIN't gonna get you back out there making work!
So...in summary up till now...unless it is manufactured inventory, you
probably won't be able to insure it.
BUT another way to cover loss of work is if you have a small business
policy (which you should if you are trying to stay afloat as a fine
artist--they are only a few hundred bucks a year) is to find out if you
have "Loss of Income" coverage. This means that if any claimable loss
on your policy also causes you to lose income, not just property or
liability, you are covered--usually in a dollar for dollar amount.
Unfortunately, in most cases you need proof such as a contract. So
really this only covers you for things such as commissions. For
example, your policy covers fire. Your studio burns up. Along with
your studio goes the portrait of the long dead Bobby Joe Smith Sr. which
was commissioned by the Smith Estate. You inform the Smith Estate of
the tragedy and that it will be three months before you can rebuild your
studio elsewhere (realistically this might take longer with how long
claims can take to come through). The Smith Estate says this is no
good. They needed that painting in a month for the 100th annual Bobby
Joe Day festival. They break the contract and go find another painter.
Well, that my friend is lost wages and would be covered.
You may have known all of the above already...but maybe there are some
avenues you can pursue in here to help insure that you can keep working
should you suffer a loss. Hopefully you haven't signed anything yet and
have the good sense to see the value in finding an attorney you can
trust and call once or twice a year when these sort of things arise.
It strikes me that you mentioned this gallery did not have flood
insurance. Are you in a region where they should? If so, I'd take this
as a sign that the gallery may be cutting corners. (Of course some
insurance companies are beginning to phase out flood coverage in coastal
regions below sea level.) Perhaps this is a NEW gallery and they
decided to go with no frills fire and earthquake coverage? If so, I'd
assert that this is an unwise corner which they are cutting. The price
difference between comprehensive versus selective coverage is nominal.
Ultimately though, whatever their insurance is at the gallery, if the
contract does not say (at the time of signing) that your property/work
falls under the umbrella of comprehensive coverage then it does not.
It's that simple.
So if you want that in there, you have to get them to put it in before
you will sign.
As for loophole in insurance? The majority of insurance companies in
this country are pretty good at paying out for legitimate claims. It
just takes a paper trail to get your money. Business and property
insurers tend to be a bit better in the states than health insurers (at
least in my experience, but then again, I've never filed for Hurricane
damage...). If you are afraid of payment loopholes, you could try and
get them to ammend the contract with a deliniated plan of payment should
any disasters occur. This tightens the loophole and can give you a
schedule for legal action. For example, you could have them put
something in like "full reimbursement of works in bla-bla circumstance
will occur within 12 months of initial loss." This obviously is not the
exact legaleese, but you get the picture. A year passes, no money...by
the contract you have a court case. Course you also might want a first
payment listed there...perhaps 25% of your loss within 6 months? This
can function as a litmus test for if you will need to seek any legal
action.
At the end of the day, don't get too wound up about this stuff...cuz all
it really is is insurance. This sort of stuff helps form the chassis of
your art business identity. In most cases insurance is just that. In
business you make it rule of thumb to cover your ass.
Last but not least, with all this stuff you have to look at your
artmaking/showing/selling and decide is this your business and
livelihood or is this, from economic terms, a "hobby." (Yes, that term
"hobby" stings...because it sounds so degrading. But this is just a
legal business entity term for tax purposes etc.) You can be a very
serious artist, but choose to relegate your practices to that of "hobby"
to just forego all this business stuff. I know a few folks who manage
to do it as a dual career. Advertising by day, Fine art by night. They
make enough in advertising that they can suffer losses in the fine art
stuff. And the two careers leave them no time to run the independent
business. But this is all stuff for you to work out...which you
probably have anyhow.
With that, I'll take a deep breath, step down from this "Running a Small
Business SoapBox", and sign off.
Cheers, Jim
Charles Eicher
<thepa...@designwrite.nu> wrote:
> Are artists expected to have their own insurance when they leave their
> art on consignment at art galleries?
>
> I'm dealing with a gallery that says in its contract that it provides
> fire and earthquake insurance, but artists are expected to provide theri
> own theft insurance.
Sounds pretty fishy to me. When you come into the gallery to check if your
work was sold, but it isn't there, the gallery can always claim your work
was stolen, even if it was really sold. I've heard of this scam before.
> There is no mention in the contract of other kinds of coverage, such as
> flood, mishandling, misplacing, etcetera. There is also no mention of
> what percentage of the wholesale value of the art on consignment that
> will be covered in the event of a fire or earthquake, and when such
> payments would be made, so there are lots of loopholes the gallery and
> insurance company can use to avoid paying the artists in the event of a
> catastrophe, from what I can tell.
A long time ago, when I was a newbie in this newsgroup, I promised to post
some sample consignment contracts that I got from California Lawyers for
the Arts. I recently located them, I think its probably a good time to post
them. It would give you a good example of what is expected from a gallery.
I'll try to get them up asap (of course, I said that about 4 years ago!)
----------------
Charles Eicher
cei...@inav.net
----------------
RC
Charles Eicher wrote in message ...
I'm an exhibiting artist and would like to see these contracts.
This is a great topic for artists since there are crooks running businesses
out there taking advantage of beginning artists who do not have legal
knowledge of these situations.
Thank you!
RC
Andrew Werby
<Jean-...@worldnet.att.net> wrote:
> Tony Wypkema wrote:
> >
> > Are artists expected to have their own insurance when they leave their
> > art on consignment at art galleries?
[It can make one feel better, but it can be hard to collect, especially in the
case of a "mysterious disappearance". Unless one can establish the fact that
ones paintings have regularly been selling for a certain price, the insurance
company won't pay when one goes astray.]
> >
> > I'm dealing with a gallery that says in its contract that it provides
> > fire and earthquake insurance, but artists are expected to provide theri
> > own theft insurance.
> >
> > There is no mention in the contract of other kinds of coverage, such as
> > flood, mishandling, misplacing, etcetera. There is also no mention of
> > what percentage of the wholesale value of the art on consignment that
> > will be covered in the event of a fire or earthquake, and when such
> > payments would be made, so there are lots of loopholes the gallery and
> > insurance company can use to avoid paying the artists in the event of a
> > catastrophe, from what I can tell.
> >
> > Thank you.
> >
> > Tony Wypkema
>
[Onesided contracts like this have become more common as the imbalance of
power between artists and galleries has grown. Besieged as they are by
artists begging them to take their work, one can hardly blame them for
concluding that art is easy to get for free, and that artists will sign
anything just to get in out of the cold. While in most other situations
one can negotiate the terms of a contract, I suspect these guys will just
laugh at you and your lawyer (if you get one.) This is basically a
take-it-or-leave-it situation. If you don't sign, there are plently more
artists out there who will. And when they find their art has disappeared,
they will find they have no recourse, and will take their remaining art
back. This is no problem for the gallery- artists can easily be replaced.]
> Tony:
>
> It's hard to give you solid advice while not knowing the nature your
> work (do you do installations vs. ceramic mugs), your current career
> standing (ie are you just starting out vs. being a hot item with a good
> deal of negotiating power), the nature of the gallery (is it an
> alternative space? a coffee house? or a retail gallery?), and the
> status of the gallery.
[It is true, a "name" artist with proven sales has more negotiating power
than an unknown. But they run as much risk of being victimized, because
they are dependant on the gallery to report sales and pay them, which the
gallery can easily neglect to do. It has more incentive to do so, since
the amounts will be larger than the sales of an unknown artist- but of
course an artist with a track record will have an easier time getting a
claim paid by his own insurance company. If the gallery does claim to
have insurance coverage protecting artists against all losses, including
theft and misplacement, make sure to ask for a copy of it, since the
gallery can easily disappear along with all its paperwork.]
>
> That said though, first bit of advice: Contracts. Remember these are
> always negotiable. This is where some of the "status" elements come
> in. What sort of bargaining power do both parties have? (The parties in
> this case are you and the gallery.) How much do they need you? How
> much do you need them? If this deal sounds too sour, can you do
> business elsewhere? Or is this THE gallery to be involved with?
>
> Also remember that once signed a contract can be Binding with a capital
> B. If you can afford it, it might be in your best interest to hire an
> attorney for an hour or two of consultation. You might not do this for
> JUST this contract, but rather to cover the basics of your legal rights
> where you live and do business and what language to look for in the
> contract. (Plus, looking at your e-mail address, I'm not sure what
> country you're in. Remember, laws and rights vary from government to
> government. My experiences are as an American artist functioning in the
> U.S. and on a few occaisons abroad.)
[Laws regarding consignment vary widely from state to state within the US.
While some states have laws to protect artists who have left work with
galleries, many do not, and may for example allow work on consignment to
be seized by the gallery's creditors and sold to pay their claim, without
any of the proceeds going to the artist. Putting work on consignment is a
lot like giving it away.]
>
> The fact that your work is being sold on consignment only gives me
> little sense of your situation. I have encountered rather elite and
> well respected galleries that sell work only on consignment (especially
> any new genres work).
[If one can get something for free, there is no sense in paying for it, is
there? While the gallery system started with a different arrangement;
gallerists sponsoring an artist while he painted for a year or so, then
buying the result and selling it at a high mark-up, the flood of artists
desperate to get into a gallery has made it possible to shift the financial
burden entirely onto the artist's shoulders, so it is now all but unheard-of
for a gallery to advance money to its artists, or to buy work from any but
the most bankable contemporary artists.]
Likewise, I know of several coffee shops in my
> neighborhood that run a similar arrangement of sale on consignment. One
> might assume that the well respected gallery would do its best to
> protect its assets. One of which is the longevity of their
> relationships with the artists it represents--especially because this
> work is on consignment and is not already in their inventory of retail
> merchandise!
[To me, it seems like the sale of anything which has been purchased, and
represents an investment of the gallery's capital, would be more crucial
to the gallery than work which is merely on consignment. The sale of the
latter would be helpful, no doubt, but failure to sell it would cost
nothing. It seems an argument is being made here to the contrary, but it
doesn't make much sense to me.]
[Actually, you can buy the insurance, it's just when you try to collect a
claim against it that you run into problems...]
[And good luck with that...]
[Calling your art "hobby" work may save on the book-keeping hassles, but it
doesn't make it any less painful when it's ripped off, unfortunately.]
>
> With that, I'll take a deep breath, step down from this "Running a Small
> Business SoapBox", and sign off.
>
> Cheers, Jim
[Thanks for an excellent contribution, Jim. Insurance for art is a somewhat
murky topic, which I congratulate you for illuminating somewhat, although I
may disagree on some particulars.]
Andrew Werby
UNITED ARTWORKS- Sculpture, Jewelry, and other art stuff
http://unitedartworks.com
http://www.computersculpture.com for 3d design tools
hunh...@bellsouth.net
progress, works in transportation, and for works on exhibit.
Tony Wypkema wrote:
> Are artists expected to have their own insurance when they leave their
> art on consignment at art galleries?
>
hunh...@bellsouth.net
There is 3 types of insurance you need to carry:
1. Work in progress
2. Transportation Ins.(to cover the piece(s) when you are transporting
them)
3. Damage and or Theft.
4. Exhibition rider
I strongly recommend that you contact a commercial insurance broker. Forget
Allstate, State Farm, etc. Insurance comes in different prices for different
levels of coverage.
It is not uncommon for a gallery to request insurance. In fact it is the
norm. I have been with a major galleries for many years and I never
transport or exhibit a painting without having coverage. Your insurance
costs are a deductible item on your schedule C. So shop around for your best
deal and good luck with your show.
Fran