When she enters an art museum, Emily Schaffer has a lot on her mind. As a student of art history, she can trace different styles and techniques across time.

Her own favorite artists — Jenny Saville, Egon Schiele and Lucian Freud — all worked in portraits: Saville’s dotted with splotches of bright color; Schiele’s emphasizing the angular, almost violent nature of the body; Freud’s marking the imperfections in human skin.

As a painter herself, she’s invested in the different materials artists use — watercolors, charcoal, oil paints, canvas. She considers textures and colors, what kind of brush or pencil a particular artist may have used. Of course, there’s also the emotional impact of a piece, the ability to stand back and get lost in a work.

Even as all this swirls through her mind, she’s considering how the art is being cared for. Are the items carefully displayed? Perhaps a painting is too close to a sprinkler system or a sculpture could be accidentally knocked over by someone passing by. You see, Schaffer is a fine arts insurance broker. An assistant vice president with Risk Strategies, she enters a museum and thinks not just of the art but also how it’s being protected.

“I definitely walk into a museum or gallery now with a ‘risk manager’ lens, where I consider how items are displayed and if it poses a risk of damage,” she said. “I work with major clients like huge auction houses, galleries, billion-dollar private collections, and then my favorite — living artists and artists’ foundations.”

Emily Schaffer, assistant vice president, Risk Strategies

Schaffer’s deep expertise isn’t an anomaly in the fine arts insurance world; it’s the norm. Brokers and underwriters alike often have a deep education and love for the arts. “It really helps us connect to our clients,” Schaffer said. “Having a background in art allows us to have conversations with them that are not just about insurance.”

In a segment of the insurance industry where losses are emotional and passion for the items being financially protected is high, brokers and underwriters can draw on their knowledge of fine arts to create new insurance products targeted to specific types of collections, offer risk management advice and identify the right restoration professionals in the event of a loss.

From Couture to Moon Rocks

Fine arts and specie insurance has always had a wide purview. The category covers paintings, sketches, sculptures — items typically classed as fine arts — but also decorative arts, like rugs and antique furniture, as well as collectibles. (The word “specie” comes from the Latin speciēs, meaning “appearance,” but its modern, English usage has been used to mean everything from currency to the types of jars chemists once used to collect various objects.)

As with its general usage, “specie” has become a kind of catchall term within fine arts insurance, used to describe the ephemeral collections that have become more common in the industry within recent years.

Ron Fiamma, president and founder, Treadwell

“These are items that collectors have a unique, passionate attachment to, things that oftentimes they have spent a lifetime collecting,” said Ron Fiamma, president and founder of Treadwell, a managing general agent focused on fine arts and specie insurance affiliated with Applied Underwriters. “They plan on passing these cherished pieces down to their family for generations.”

“We’re seeing a lot more ephemeral material, whether it’s baseball cards or moon rocks,” added Ellen Ross, managing director of the fine arts practice at Gallagher, who does indeed work with a client who collects moon rocks. “He has had a passion for it since childhood,” she said.

In some cases, these specialty items can be scheduled on the “other” or “collectibles” section of a fine arts insurance policy, but sometimes particularly large collections need specialized insurance policies tailored to their needs. Fiamma once created a couture product for a client who owned more than 150 Hermès Birkin bags.

“We realized there are a lot of collectors out there that have couture gowns or expensive ready-to-wear pieces — all types of valuable accessories, handbags, shoes,” he said. “So we designed a product that covers those objects and their unique needs.”

The Risky Business of Fine Arts Insurance

When people think of damage to fine arts pieces, they tend to think of dramatic, high profile stories. Climate activists trying to glue themselves to the spectral, waiflike figure in Edvard Munch’s 1893 painting “The Scream” or smashing cake into the Mona Lisa (don’t worry — her impenetrable smile is encased in equally impenetrable glass).

These tales, however, are few and far between, fine arts insurance experts said. Fine art collections face greater risk of damage from falling off the wall after a poor installation or becoming damaged during transportation. Art heists, too, are another flashy but uncommon type of loss — though Risk & Insurance® did cover the story of a stolen, recovered and restored De Kooning painting back in 2021.

Jewelry theft, Fiamma said, is more common for fine arts and specie insureds, since gems can be easily pocketed, cut and sold on the black market.

“The risk is stagnant. If it’s properly installed, it stays on the wall,” Ross said.

Since art risk remains fairly stable, a great deal of it can be prevented. Fiamma spends much of his time educating clients about properly hanging, storing and transporting art. In some cases, he’s seen insureds hang paintings in front of pipes that are at risk of bursting or try to ship artworks using FedEx or UPS.

“Most of those losses are preventable,” Fiamma said. “It’s really a question of educating the clients to make sure that they’re using best practices to protect their collections.”

That’s why Fiamma is often looking for fervor when evaluating potential insureds. In a conservative navy suit and matching tie, he is the picture of an insurance professional, an industry not typically associated with passion. But he wants to find clients who feel deeply about their collections, figuring they will be better stewards of the work.

“We feel passionate investment in the objects elicits a higher standard of care,” Fiamma said. “We prefer to underwrite and insure clients where we know there’s personal passion for the pieces in the collection.

“If you know that someone collects antique violins and you ask them to talk about their collection, they’ll talk to you for hours and before long you’ll know how many violins they’ve ever owned, why they bought them and which ones they’ve sold,” he added. “The passion is evident.”

To protect their collections, Ross, Fiamma and Schaffer agreed, insureds should evaluate the risks on their property and keep an up-to-date inventory of the works they own. “That can be as simple as an Excel spreadsheet,” Fiamma said. “In the event of a disaster, whether it’s a fire or flood or theft, it’s very easy to determine what you had and what the values were.”

When a Claim Occurs: Managing Restoration and Total Loss

Though passion is key to motivating fine arts insureds to protect their works, it can also make losses more emotional. Fine arts insurance isn’t like car or even property insurance. Collectors have spent lifetimes curating and protecting these items. Artists have spent hours on a particular project. Gallerists and museum staff have studied art and love each of the pieces under their protection deeply.

“When people have a passion for something, obviously, there’s a lot more sensitivity if something were to happen, if it were to be damaged,” Ross said.

“Making the client whole in our world has a slightly different definition than perhaps other areas of insurance,” Fiamma added. “In almost every claim scenario, the client’s desire is to retain the object after the loss.”

If a claim occurs, clients often want to keep and restore the artworks, if at all possible. Carriers will find restorers to return the work to a condition that’s as close as possible to the original. Once an insured and their carrier select a restorer and work is completed, an appraiser will come in and determine if the restored piece is now worth less than it was before the damage occurred. An insurer will issue a payment for that difference in value in addition to covering the restoration process.

“We want it to be done correctly with the right materials and the right methods,” Ross said. “Professional restorers are meticulous, and they generally do not make mistakes.”

Insurers don’t just select any restorer or appraiser to complete the work. Fiamma tries to find experts in each particular artist, collection or art period the piece is from. If an insured comes in with a damaged Barbie Doll collection, he’s looking for the preeminent Barbie Doll restoration expert and appraiser, not just one who specializes in toys.

“We don’t simply hand our client a list of appraisers or restoration experts,” Fiamma said. “We actively work with them to make sure that we are choosing the most appropriate appraiser or conservator in the field for that particular work of art or object.”

Finding the right restoration professional and appraiser is important because a particular style or medium used by an artist can affect an artwork’s value after it’s been damaged. Schaffer worked with a client who filed a claim after a Lucio Fontana painting they owned was scratched.

Characterized by slashed canvases and an extremely smooth, almost photo-like painting style, the effect of Fontana’s work can be destroyed by a single scratch. Schaffer’s client had a tiny, barely perceptible slash in the corner. For another artist’s work, this could be easily repaired, but for a Fontana it was a total loss.

“Another type of painting, that is something that can be really easily repaired,” Schaffer said. “But these paintings almost look like photographs. One tiny scratch cannot be easily repaired without causing a major depreciation in value.”

And art losses aren’t just between a collector and their insurer. If an artist is living, the Visual Artists Rights Act protects their ability to disavow an artwork or request that it be destroyed after it becomes damaged.

“Working with living artists can also be really tricky,” Schaffer said. “They might want to completely disavow a piece, which would be a total loss covered by the policy, but it can affect the insurance rates if this is a habit the artist gets into.” &