Fine Arts

Eight Questions for 2017 Power Broker Mary Pontillo

2017 Power Broker Mary Pontillo talks to R&I about her love of the Fine Arts business.
By: | February 22, 2017 • 8 min read

Intrigued by the unique world of risk she handles, Risk & Insurance® asked (Risk Strategies Company subsidiary) DeWitt Stern Vice President and 2017 Power Broker® winner Mary Pontillo to tell us more about her love for fine art and why helping to cover risk in the art world means so much to her.

R&I:  Mary we know you’ve got a background in art history. It must be very fulfilling then for you to work in the business of insuring art. Tell us more about your connection with art and artists and what it means to you.

MP: The only way I would be happy in the insurance industry is by doing what I’m doing; insuring artwork. It’s often the case that people in the art world don’t come from a business background. I feel I can help art-oriented people understand something both very esoteric and important. I speak their language and essentially become a translator of insurance jargon into something an art-oriented person can understand.

For instance, when I sat down for the first time with a well-known artist to discuss what he wanted out of an insurance payment, it was deeply gratifying.  He had never really thought about how he’d use his insurance or what he expected from a claim. Being able to counsel one of the most famous living artists on something like this was quite special for me.

R&I: Who are some of your favorite artists, past and present?

MP: I dedicated a great deal of time to studying early 20th Century American art so I love artists like Marsden Hartley and Guy Pene du Bois.

Janine Antoni’s work always makes me think. Her “Lick and Lather” work consisting of self-portrait busts – half made of chocolate and half made of soap, the soap lathered and chocolate licked — always makes me think in a circular way. What if she licked the soap? I love artwork that gives me a visceral response like hers.

Gerard Richter’s technical abilities stop me in my tracks.

I own a Ghada Amer screen print and dream of the day I will own one of her prints with vellum and embroidery.

R&I: Tell us about a devastating art loss and how you helped the insured to recover.

MP: Nothing compares to the days, weeks and months after Superstorm Sandy. Beginning at midnight, when Sandy hit NYC, claims reports poured in. The first was from a museum client via text as I was trying to get a few hours of sleep during the intense storm. A colleague and I both lived in Queens and the few days following Sandy we were the only people on our team with electricity. We were able to log on and set everyone’s out of office messages to forward to our cell phones and email addresses.

Advertisement




Clients that I’ve known for years — some of the most stoic people — were facing the worst situations their businesses had ever seen. I’ll never forget one of the most well respected dealers in the industry calling me and saying: “I am not exaggerating when I say that this is absolute devastation.”

Knowing that I was the voice of calm and direction made me feel like all of the policies I’ve sold and serviced over the years came to life. We walked clients through triage steps over the phone and connected them with claims adjusters. Those first 72 hours were some of the most intense and stressful while helping claims adjusters, my colleagues on the ground in Chelsea and Brooklyn, and my clients through the recovery process.

I would speak to a frantic client on day one after Sandy, try to calm them down and tell them when to expect the claims adjuster. I’d then speak to them on day two after they met with the claims adjuster — the best thing was to hear: “After meeting with my claims adjuster this morning, I felt so much better.”

Clients that I’ve known for years — some of the most stoic people — were facing the worst situations their businesses had ever seen. I’ll never forget one of the most well respected dealers in the industry calling me and saying: “I am not exaggerating when I say that this is absolute devastation.”

R&I: From what we gather, the shipping of art and art collections is one of the thornier risk management and risk transfer challenges.  What “tales of the road” can you tell us about art shipment risk management challenges you have faced and overcome?

MP: I handle many art warehouses, packers and shippers, as well as dealers, collectors, museums, foundations, etc. so I understand both sides of these transactions very well. Some of the most common issues that come up involve the documentation shippers require which severely limits their liability. It’s important to understand these technicalities of the shipping process in order to give art clients proper advice.

One of the most interesting situations I’ve found myself in was a client moving into an upper floor in a building in Manhattan. Due to the size of many of the artworks, they had to have the works rigged via crane through a window in the apartment. We had to get the insurance company on board, approving each and every work that was going to be rigged. The job was delayed a number of times due to high winds. On the final day permits were available from the city, the insurance company and I were there and watched the whole process. Little did we know, an earthquake struck NYC at the same time the works were suspended 30 floors in the air. We felt nothing on the ground but the workers in the apartment felt it. Luckily it had no effect on the artwork, but it’s a good story!

R&I: “Event Cancellation Expense” coverage has got to be an area of interest for art exhibitors these days, given the interruptions we have due to terrorist acts and instances of political upheaval. Can you give us your take on this coverage and the appetite for it given the state of the world today?

MP: There have been two instances that had some broad effect on the art world: the volcanic activity in Iceland back in 2010 which canceled flights around the same time as the London Print Show and the Paris Photo show closing early due to the Paris terror attacks.

Directly after the Paris incident, we went to our London broker to develop a program for Event Cancellation coverage. We were able to set up a policy that would cover lost business due to artworks or key employees not arriving (as in the case of air traffic affected by the Volcano) due to things outside of their control as well as part of the event being cancelled. We can add this onto a Lloyd’s Dealer policy or issue as a stand-alone policy. As time passes from these events, people feel less inclined to purchase these kinds of coverage. In 2017 this is a product we are re-emphasizing as it is unique, pragmatic and reasonably priced.

R&I: High net worth insurance is a sector the carriers are devoting a lot of resources to.  Without naming names tell us what you can about some of the private collections you insured and the challenges you faced?

MP: We have some private collectors whose collections are relatively stable with few loans and the occasional purchase but on the flip side, we have private collectors who loan, buy, sell, consign, and collateralize artwork with great frequency. There are some collectors who send us updates every single day about such transactions.

A few of the more challenging, but also very interesting, aspects of these transactions are negotiating complex loans and ensuring proper insurance is in place for loans using the art collection as collateral.  When lending their artwork, different collectors have different requirements for museums and galleries. Sometimes these requirements are quite rigorous and require a good deal of negotiation before the loan terms are agreed upon. These transactions require a nuanced approach — understanding the attitude of the collector toward the loan and ensuring we adequately protect the client while ensuring insurance is not the reason the loan negotiations stall.

R&I: What are some current, pressing risk management issues for museums? We’d imagine cyber threats such as spear-phishing have got to be among them.

Advertisement




MP: Museums, dealers, and foundations are all being affected by social-engineering threats, wire funds transfer fraud and the like. Almost every week we get notification from a client of a hacking attempt or, unfortunately, a few successful wire transfer frauds where clients have lost money. The Art Dealers Association of America warned their member-dealers of these problems a few times. We have also been emphasizing these attacks with our clients and highlighting the coverages that can help protect them from such attacks (cyber, crime including social engineering, etc.). Unfortunately, while the coverage begins at a very reasonable premium, very few policies have been purchased.

R&I: Do you know how many times you’ve won the Power Broker® designation as a Fine Arts broker, or is it a case of “who’s counting?”

MP:  I honestly don’t know. I took a year off when I had a baby and encouraged my entire team to apply especially since they were the ones who took such great care of my clients while I was on maternity leave. Being in a field dominated by female Power Brokers is very satisfying. As a manager of a team of seven women, I love seeing them grow (some from beginning as our departmental assistants) and receive these kinds of awards. Advocating for the women around me and seeing them succeed is the most rewarding aspect of my job.

For the record, Mary’s Power Broker® win in 2017 was her sixth.-eds

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Absence Management

Establishing Balance With Volunteers

It’s good business to allow job-leave for volunteer emergency responders, whether or not state laws apply.
By: | January 10, 2018 • 7 min read

If 2017 had a moniker, it might be “the year of the natural disasters,” thanks to a phenomenal array of catastrophic or severe events— hurricanes, tornadoes, wildfires, ice storms and floods.

Advertisement




Combined with smaller-scale fires and other emergencies, these incidents tax the resources of local and state emergency services, often prompting the need to call volunteer emergency responders into action.

But as lean as most organizations are already running, volunteer activities can sometimes cause friction between employees and employers. Handling conflicts the wrong way can potentially lead to legal headaches, harm employee morale and batter a company’s reputation.

State by State Variations

Most employers are aware of the various federal and state leave laws protecting their employees, including family and medical leave, pregnancy leave and military leave. But leave laws that protect the livelihoods of volunteer emergency responders are more likely to fly under the radar of some HR managers and risk managers.

Such laws don’t exist in every state, but more than 20 states do have some type of law in place to protect volunteers including emergency responders, firefighters, disaster workers, medical responders, ambulance drivers or peace officers.

Marti Cardi, vice president of Product Compliance for Matrix Absence Management

The laws vary broadly. Nearly all specify that such leave be unpaid, and that employees disclose their volunteer status to employers and provide documentation for each leave. But there is a spectrum of variations in terms of what may trigger an eligible leave. Some, for instance, apply for any emergency that prompts a call from the volunteer’s affiliated responder group. Others may require a government declaration of emergency for the law to be triggered.

While many of the laws do not explicitly require employers to let employees leave work when called to an emergency during a shift, most specify that an employee may be late or even miss work entirely without facing termination or any other adverse employment action.

Some states mandate a maximum number of unpaid leave days that a volunteer can claim. But others may place more significant burdens on employers. In California, for instance, employers with 50 or more employees are required to grant up to 14 days of unpaid leave for training activities in addition to any leave taken to respond to emergency events. For multistate employers, keeping on top of what obligations may apply in each circumstance can be a challenge.

Significant Risks

Large or mid-sized employers may rely on absence management providers to keep them in compliance. For smaller employers though, it may be as simple as looking up a state’s law via Google to find out what’s required. However, checking in with the state department of labor or the company’s attorney may be the best way to get the correct facts.

“I would caution that just because you don’t find something [on the internet], it doesn’t mean it’s not there,” said absence management and employment law attorney Marti Cardi, vice president of Product Compliance for Matrix Absence Management.

For example, Cardi said, an obscure Texas law provides job-protected leave for volunteer ham radio operators called into service during an emergency.

Cardi said employers should task HR to investigate the laws in each state the company operates in, and to ensure that supervisors are educated about the existence of these laws.

“If a supervisor is told by one of his or her employees, ‘Sorry I’m not coming in today … I’ve been called to volunteer firefighter duty for the [nearby region] fire,’” she said, you want to be sure that the supervisor knows not to take action against the employee, and to contact HR for guidance.

“Training supervisors to be aware of this kind of absence is really important.”

Advertisement




An employer that does terminate a protected volunteer for responding to an emergency may be ordered to pay back wages and reinstate the employee. In some cases, the employee may also be able to sue for wrongful termination.

And of course, “you don’t want to be the company in the headlines that is getting sued because you fired the volunteer firefighter,” she added.

If an employer bars a volunteer from responding, the worst-case scenario may be a third-party claim. Failure to comply with the law could give rise to a claim along the lines of “‘If you had complied with your statutory obligation to give Jane Doe time to respond, my loved one would not have died,’” explained Philadelphia-based Jonathan Segal, partner at law firm Duane Morris and managing principal of the Duane Morris Institute.

“That’s the claim I think is the largest in terms of legal risk.”

Even if no one dies or is seriously injured, he added, “there could still be significant reputational risk if an individual were to go to the media and say, ‘Look, I got called by the fire department and I wasn’t allowed to go.’”

The Right Thing to Do

What employers should be thinking about, Segal said, is that whether or not you have a legal obligation to provide job-protected leave for volunteer responders, “there’s still the question of what are the consequences if you don’t?”

Employee morale should be factored in, he said. The last thing any company wants is for employees to perceive it as insensitive to their interests or the interests of the community at large.

“Sometimes employers need to go beyond the law, and this is one of those times,” — Jonathan Segal, partner, Duane Morris; managing principal, Duane Morris Institute

“How is this going to resonate with my employees, with my workforce, how are people going to see this? These are all relevant factors to consider,” he said.

There’s an argument to be made for employers to look at the bigger picture when it comes to any volunteer responders on their payroll, said Segal.

“Sometimes employers need to go beyond the law, and this is one of those times,” he said. “Think about the case where’s there’s not a specific state law [for emergency responders] and you say to a volunteer, ‘No, you can’t leave to deal with this fire’ and then people die. You as an employer have potentially played a role, indirectly, because you didn’t allow the first responder or responders to go,” he said.

The bottom line is that “it’s the right thing to do, even if it’s not required by law,” agreed Cardi.

“I feel that companies should have a policy that they’re not going to discipline or discharge someone for absences due to this kind of civic service, subject to verification of course.”

Clear Policy

While most employers do strive to be good corporate citizens, it goes without question that employers need to guard their own interests. It’s not especially likely that volunteer responders will try to take advantage of the unpaid leave allowed them, but of course, it could happen.

That’s why it’s important to have policies that are aligned with state laws. Those policies could include:

  • Notifying the company of any volunteer affiliations either upon hire or as soon they are activated as volunteers.
  • Requiring that employees notify a supervisor as soon as possible if called to an emergency (state requirements vary).
  • Requiring documentation after the event from the head of the entity supervising the volunteer’s activities.

If at some point it becomes excessive – someone has responded to emergencies five times in nine weeks, then it’s time to examine the specifics of the law and have a discussion with the employee about what’s reasonable, said Segal. It may also be time to ask specifics about whether the person is volunteering each time, or are they being called.

Advertisement




In some cases, the discussion may need to be about finding a middle ground, especially if an employee has taken on an excessively demanding volunteer role.

“We encourage volunteers to pick the style that best fits their schedule,” said Greta Gustafson, a representative of the American Red Cross. “Disaster volunteers can elect to respond to disasters locally, nationally, or even virtually, and each assignment varies in length — from responding overnight to a home fire in your community to deploying across the country for several weeks following a hurricane.

“The Red Cross encourages all volunteers to talk with their employers to determine their availability and to communicate this with their local Red Cross chapter.”

Segal suggests approaching it as an interactive dialogue — borrowing from the ADA. “Employers may need to open a discussion along the lines of ‘I need you here this week because this week we have a deliverable on Friday and you’re critical to that client deliverable,’” he said, but also identify when the employee’s absence would be less critical.

No doubt there will be tough calls. An employer may have its hands full just trying to meet basic customer needs and need all hands on deck.

“That may be a situation where you say, ‘First let me check the law,’” said Segal. If there’s a leave law that applies, “then I’m going to need to comply with it. If there’s not, then you may need to balance competing interests and say, ‘We need you here.’” &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]