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Theft

Inventory Check Shows Over 300 Books Stolen

With global internet sales of stolen books changing the risk management equation, book dealers look for solutions to protect these antique treasures.
By: | April 23, 2018 • 4 min read

Pittsburgh, we have a book problem.

Although details are only just coming to light, a routine inventory for an insurance appraisal a year ago at the Carnegie Library discovered hundreds of books, maps and other antiquarian items were missing from the Oliver Rare Book Room at the library’s main branch in the Pittsburgh neighborhood of Oakland. The appraisal was conducted by Pall Mall Art Advisors, and the Allegheny County District Attorney is handling the investigation. The rare book collection has been closed.

Reviewing the Inventory

As part of the investigation, the library released a detailed list of the missing materials, which has been provided to the Antiquarian Booksellers Association of America (ABAA); that organization has put its member shops and dealers on alert.

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The library itself has not issued any press releases about the theft or the investigation. But an April 4 story in the Pittsburgh Post-Gazette reported that “the list shows 173 rare books are gone. In addition more than 590 maps and 3,230 plates were removed from another 130 books — likely cut out with razors or X-Acto blades. One rare book dealer, Michael Vinson, estimated the value of the stolen materials at more than $5 million.”

The Post-Gazette also reported that “in 1991, two rare book appraisers alerted Carnegie Library leaders that its valuable collection of centuries-old maps and rare books would be much safer and better preserved in more secure, nearby research libraries.”

According to an April 3 report in the Library Journal, “on the list of stolen items are ten volumes published before the year 1500 and many more from the 17th century. There is a first edition of Philosophiae Naturalis Principia Mathematica by Isaac Newton, published in 1687, as well as a 1776 first edition of Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations.”

Rare Books, Rare Theft

While the theft from the Carnegie Library is a major loss, it is “an anomaly” and not reflective of a wider increase in theft of rare books and documents, said Joyce Kosofsky, who is on the board of governors and is chair of the ethics committee at ABAA.

“I don’t see a rising trend in book thefts. Theft has always been an issue as anyone in retail, antiques or collectibles knows. You have to keep your eyes on valuable books,” Kosofsky said.

She added: “The major theft from the Carnegie Library is very disturbing. You just don’t see thefts of multiple books from one source very often.”

Kosofsky runs the Brattle Book Shop in Boston, established in 1825, which is one of the country’s oldest and largest antiquarian book shops, and where Kosofsky is “queen of all things.”

“The internet has changed everything. It is the wild west. Anyone with a modem can sell anything.” — Joyce Kosofsky, chair of the ethics committee, ABAA

While major thefts of rare books may not be rising, they certainly are not rare. The International League of Antiquarian Booksellers (ILAB) dedicates an entire section of its website to information about thefts of collections, including theft from a warehouse in London in January 2017 and books stolen from the National Library of Sweden between the years 1995 and 2004.

In the Carnegie case, the ILAB noted, “many of these items may have stamps or other markings reflecting ownership by the Carnegie Library of Pittsburgh and would also not likely be marked for deaccession. A number of these items may have also been sold by or through Pittsburgh area booksellers. ILAB members are being alerted about the theft.”

Telephone numbers and email addresses for the detectives at the DA’s office were provided in the case someone spots a marked book while browsing local shops or through online senders.

Managing Book-Theft Risk

Shops and dealers who are members of the trade associations are not the problem, Kosofsky explained. “In our business, reputation is worth more than one sale, especially anything the least bit shady. Provenance is everything.”

Rather, she added, “the internet has changed everything. It is the wild west. Anyone with a modem can sell anything.”

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Margaret Bussiere, vice president, DeWitt Stern, the fine-arts division of specialty brokerage Risk Strategies, said that for rare books and documents, the issue is not so much insurance — the market is soft and capacity is ample — but rather risk management.

Rare books and documents “have been treated with cultural and historical reverence,” Bussiere said, “but not as cash-value objects. Professionals and institutions have to be aware that their collections are being pilfered by professionals. Unlike fine art, which is difficult to sell, books and documents are easy to sell.”

And sometimes too easy to steal. Bussiere related one case where a crate of rare books was being returned from a fair and became a crime of opportunity. The crate was opened in the warehouse and all the price tags were still on the books. The thieves did not need to know a thing about the objects, they just took the most valuable ones.

“Thieves have copped to the fact that this is easy money,” said Bussiere. “Underwriters may have to start putting in theft deductibles, or warranties, for locked cases. Many already have exclusions for unattended vehicles, but these are inland marine policies that are very broad. They cover everything that is not excluded, and what is excluded is not very much.”

Update: As of July 20, 2018, two men have been charged with stealing these books and other rare materials from Carnegie. Read more about that here&

Gregory DL Morris is an independent business journalist based in New York with 25 years’ experience in industry, energy, finance and transportation. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

High Net Worth

High Net Worth Clients Live in CAT Zones. Here’s What Their Resiliency Plan Should Include

Having a resiliency plan and practicing it can make all the difference in a disaster.
By: | September 14, 2018 • 7 min read

Packed with state-of-the-art electronics, priceless collections and high-end furnishings, and situated in scenic, often remote locations, the dwellings of high net worth individuals and families pose particular challenges when it comes to disaster resiliency. But help is on the way.

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Armed with loss data, innovative new programs, technological advances, and a growing army of niche service-providers aimed at addressing an astonishingly diverse set of risks, insurers are increasingly determined to not just insure against their high net worth clients’ losses, but to prevent them.

Insurers have long been proactive in risk mitigation, but increasingly, after the recent surge in wildfire and storm losses, insureds are now, too.

“Before, insurance was considered the only step in risk management. Now, our client families realize it is one of the many imperative steps in an effective risk management strategy,” said Laura Sherman, founding partner at Baldwin Krystyn Sherman Partners.

And especially in the high net worth space, preventing that loss is vastly preferable to a payout, for insurers and insureds alike.

“If insurers can preserve even one house that’s 10 or 20 or 40 million dollars … whatever they have spent in a year is money well spent. Plus they’ve saved this important asset for the client,” said Bruce Gendelman, chairman and founder Bruce Gendelman Insurance Services.

High Net Worth Vulnerabilities

Laura Sherman, founding partner, Baldwin Krystyn Sherman Partners

As the number and size of luxury homes built in vulnerable areas has increased, so has the frequency and magnitude of extreme weather events, including hurricanes, harsh cold and winter storms, and wildfires.

“There is a growing desire to inhabit this riskier terrain,” said Jason Metzger, SVP Risk Management, PURE group of insurance companies. “In the western states alone, a little over a million homes are highly vulnerable to wildfires because of their proximity to forests that are fuller of fuel than they have been in years past.”

Such homes are often filled with expensive artwork and collections, from fine wine to rare books to couture to automobiles, each presenting unique challenges. The homes themselves present other vulnerabilities.

“Larger, more sophisticated homes are bristling with more technology than ever,” said Stephen Poux, SVP and head of Risk Management Services and Loss Prevention for AIG’s Private Client Group.

“A lightning strike can trash every electronic in the home.”

Niche Service Providers

A variety of niche service providers are stepping forward to help.

Secure facilities provide hurricane-proof, wildfire-proof off-site storage for artwork, antiques, and all manner of collectibles for seasonal or rotating storage, as well as ahead of impending disasters.

Other companies help manage such collections — a substantial challenge anytime, but especially during a crisis.

“Knowing where it is, is a huge part of mitigating the risk,” said Eric Kahan, founder of Collector Systems, a cloud-based collection management company that allows collectors to monitor their collections during loans to museums, transit between homes, or evacuation to secure storage.

“Before, insurance was considered the only step in risk management. Now, our client families realize it is one of the many imperative steps in an effective risk management strategy.” — Laura Sherman, founding partner, Baldwin Krystyn Sherman Partners

Insurers also employ specialists in-house. AIG employs four art curators who advise clients on how to protect and preserve their art collections.

Perhaps the best known and most striking example of this kind of direct insurer involvement are the fire teams insurers retain or employ to monitor fires and even spray retardant or water on threatened properties.

High-Level Service for High Net Worth

All high net worth carriers have programs that leverage expertise, loss data, and relationships with vendors to help clients avoid and recover from losses, employing the highest levels of customer service to accomplish this as unobtrusively as possible.

“What allows you to do your job best is when you develop that relationship with a client, where it’s the same people that are interacting with them on every front for their risk management,” said Steve Bitterman, chief risk services officer for Vault Insurance.

Site visits are an essential first step, allowing insurers to assess risks, make recommendations to reduce them, and establish plans in the event of a disaster.

“When you’re in a catastrophic situation, it’s high stress, time is of the essence, and people forget things,” said Sherman. “Having a written plan in place is paramount to success.”

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Another important component is knowing who will execute that plan in homes that are often unoccupied.

Domestic staff may lack the knowledge or authority to protect the homeowner’s assets, and during a disaster may be distracted dealing with threats to their own homes and families. Adequate planning includes ensuring that whoever is responsible has the training and authority to execute the plan.

Evaluating New Technology

Insurers use technologies like GPS and satellite imagery to determine which homes are directly threatened by storms or wildfires. They also assess and vet technologies that can be implemented by homeowners, from impact glass to alarm and monitoring systems, to more obscure but potentially more important options.

AIG’s Poux recommends two types of vents that mitigate important, and unexpected risks.

“There’s a fantastic technology called Smart Vent, which allows water to flow in and out of the foundation,” Poux said. “… The weight of water outside a foundation can push a foundation wall in. If you equalize that water inside and out at the same level, you negate that.”

Another wildfire risk — embers getting sucked into the attic — is, according to Poux, “typically the greatest cause of the destruction of homes.” But, he said, “Special ember-resisting venting, like Brandguard Vents, can remove that exposure altogether.”

Building Smart

Many disaster resiliency technologies can be applied at any time, but often the cost is fractional if implemented during initial construction. AIG’s Smart Build is a free program for new or remodeled homes that evolved out of AIG’s construction insurance programs.

Previously available only to homes valued at $5 million and up, Smart Build recently expanded to include homes of $1 million and up. Roughly 100 homes are enrolled, with an average value of $13 million.

“In the high net worth space, sometimes it takes longer potentially to recover, simply because there are limited contractors available to do specialty work.” — Curt Goetsch, head of underwriting, Private Client Group, Ironshore

“We know what goes wrong in high net worth homes,” said Poux, citing AIG’s decades of loss data.

“We’re incenting our client and by proxy their builder, their architects and their broker, to give us a seat at the design table. … That enables us to help tweak the architectural plans in ways that are very easy to do with a pencil, as opposed to after a home is built.”

Poux cites a remote ranch property in Texas.

Curt Goetsch, head of underwriting, Private Client Group, Ironshore

“The client was rebuilding a home but also installing new roads and grading and driveways. … The property was very far from the fire department and there wasn’t any available water on the property.”

Poux’s team was able to recommend underground water storage tanks, something that would have been prohibitively expensive after construction.

“But if the ground is open and you’ve got heavy equipment, it’s a relatively minor additional expense.”

Homes that graduate from the Smart Build program may be eligible for preferred pricing due to their added resilience, Poux said.

Recovery from Loss

A major component of disaster resiliency is still recovery from loss, and preparation is key to the prompt service expected by homeowners paying six- or seven-figure premiums.

Before Irma, PURE sent contact information for pre-assigned claim adjusters to insureds in the storm’s direct path.

“In the high net worth space, sometimes it takes longer potentially to recover, simply because there are limited contractors available to do specialty work,” said Curt Goetsch, head of underwriting for Ironshore’s Private Client Group.

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“If you’ve got custom construction or imported materials in your house, you’re not going to go down the street and just find somebody that can do that kind of work, or has those materials in stock.”

In the wake of disaster, even basic services can be scarce.

“Our claims and risk management departments have to work together in advance of the storm,” said Bitterman, “to have contractors and restoration companies and tarp and board services that are going to respond to our company’s clients, that will commit resources to us.”

And while local agents’ connections can be invaluable, Goetsch sees insurers taking more of that responsibility from the agent, to at least get the claim started.

“When there is a disaster, the agency’s staff may have to deal with personal losses,” Goetsch said. &

Jon McGoran is a novelist and magazine editor based outside of Philadelphia. He can be reached at [email protected]