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Digital EditionA Monumental Loss: Fine Art Collectors and Museums Grapple with the Aftermath of the Palisades Blaze
The Getty Villa protrudes like a fortress from the hills along the coast of Malibu. The concrete, protected steel and travertine building was surrounded by an inferno for a time during the fire that struck the Pacific Palisades in Los Angeles in January. It was in the mandatory evacuation zone for a period of time as the fires burned.
There was damage on the property, but the museum itself — in a feat of risk management — is built from fire resistant stone. All of the artworks housed inside were protected.
“The Getty is one of the best protected, most well-built institutions on the planet,” said Jennifer Schipf, global chief underwriting officer of fine art and specie at AXA XL. Others did not have that advantage. As the inferno raged, it killed 12 people and claimed countless properties. The losses of life and homes were devastating. In the wake of these major losses, many mourned the losses of the objects — photos, family heirlooms — that help give life meaning.
That includes works of art for many. Art expresses an artist’s innermost emotions. People relate to these works and become connected to them. The Palisades fire burned many works of cultural import, including at least 30 Warhols. “I believe this will end up being the largest single loss event in the fine art and specie market,” Schipf said.
Impossible to Prepare For
Many of the fine arts insureds who were impacted by the Palisades fires tried their best to prepare for the event. As part of the fine arts insurance process, insureds are asked how they plan to protect their works within their properties and how they plan to evacuate them. The fires thwarted these plans, however.
“A lot of our clients had evacuation plans in place because that is sometimes a requirement when you live in these CAT prone zones; We ask for that at the time of getting your insurance quoted,” said Kristina Marcigliano, CLCS, a veteran fine arts insurance broker.
“In California, a lot of our clients had earthquake or wildfire evacuation plans, but the fire and the wind spread so quickly that most couldn’t even act on those plans.”
Fine arts insureds can be private collectors, major museums, commercial galleries or even artists themselves. Each group faces different challenges when it comes to protecting art and handling claims in the aftermath of a natural disaster. Museums tend to be the most prepared. They often have risk managers or insurance professionals on staff to help them with plans. Their buildings can be more sophisticated and have built in protections for the art — especially if it’s a larger institution.
“The degree of care has to be so much greater for the museums,” Schipf said. “We all could learn a bit from the museums and institutions that do this as a full-time job.”
Commercial galleries, in contrast, might be working with a landlord, so they might be limited in any upgrades they could make to help protect the property from any natural disasters. Private collectors can take steps to protect their homes and make transportation plans — but they might not be able to evacuate their art if storms or fires move in quickly.
Protecting life has to be the priority. Artists don’t always have fine arts insurance for their homes or studios due to the high costs. So many are struggling in the face of these losses.
“I wish there was a better answer to help protect artists from situations like this,” Marcigliano said. “I would start with an artist policy form because that’s an insurance product that can protect them.”
Two Buckets of Claims
Prior to the fires, Super Storm Sandy caused the largest art losses the industry had seen in the U.S. Flooding from the storm damaged a number of works, “but because the water moved in and then back out relatively quickly, a lot of remediation was done and allowed for a significant number of partial loss restoration options,” Schipf said.
The Palisades fire, in contrast, produced a significant number of total and partial losses. Total losses occurred when works were completely destroyed by the flames. In these cases, many lost their homes, studios or gallery spaces, in addition to their art works.
“We’ve had a couple collection clients who had total losses of their homes, including their collections and we’ve had clients who lived on the outskirts of the Pacific Palisades who evacuated and when they returned to their homes, discovered the soot and smoke damage,” Marcigliano said.
Total losses are tragic, but they are straightforward from an insurance perspective. Partial losses, on the other hand, are complex from an adjusting perspective.
“Those claims can go on for a really long time if you had 20 pieces in your home, and each one needs to be assessed,” Marcigliano said.
“There needs to be a condition report for each work, and then there needs to be a treatment proposal for each work. You’re talking about 20 treatment plans to be written up by a conservator, and then the time that’s going to go into cleaning and treating each of those 20 works. That kind of claim can drag on for years and years.”
Restoring and Repairing
In the aftermath of the fires, those with partial losses caused by soot and smoke damage will soon be starting the restoration process. First things first, “make sure to arrest any damage,” Schipf said.
“Getting art out of harm’s way is critical.”
Then, insureds will likely need to find a restoration specialist. That process can be challenging.
“There’s such an emotional aspect to losing everything like this and seeing such ruin around you, and it does make clients and customers and insured vulnerable to being taken advantage of by vendors who are looking to profit in times like these, unfortunately,” Marcigliano said.
Brokers and insurers can help guide their clients through the process of finding a trusted vendor to work with to restore their artworks.
Then, insureds should prepare for this process to take time. “Art restoration is not a huge industry,” Schipf said. “It’s bound to take a very long time for the very few highly specialized conservators and restorers to get to all of the objects that need restoration and conservation.” &
