7 Critical Risks Facing the Fine Arts Industry

Fire and flood are some of a museum’s worries. Theft, loan gaps and vandalism top the list.
By: | January 1, 2019 • 5 min read

Preserving art, culture and history is a costly enterprise as many museum owners know. Even if an exhibit doesn’t boast a Rembrandt or Abraham Lincoln’s hat, it can still cost a pretty penny to keep the art and sculptures safe and insured.


There are a number of growing challenges museums and other galleries have to be on top of if they want to protect their collections from the obvious risks — flood and fire — as well as less-thought-of but equally important risks — loan gaps and transit.

1) Flood

Water damage can be a scary thing, especially for museums. Books, paintings, sketches, portraits and photographs — these products are extremely susceptible to water damage.

In 2017, Hurricane Harvey unleashed 50 inches of rain on unsuspecting Houston, leaving behind an estimated $75 billion in total damages thanks to flood waters. In addition to homes and businesses, Houston’s Theater District took a big hit. The Wharton County Historical Museum and 20th Century Technology Museum were nearly covered in muddy flood waters.

Mark Schulze, technical director of the 20th Century Technology Museum, told the LA Times, “Wharton County (who owns the museum building) says it will not pay for repairs to make the building habitable again, and conventional occupancy insurance almost never covers flood damage. Preliminary estimates for full remediation of the existing building are on par or exceed the cost of building an entirely new building.”

2) Vandalism

The Little Mermaid — Copenhagen, Denmark

It does not have to be a club-wielding, art-hating thug who takes down an invaluable work of art. Vandals come in all shapes and sizes, from protesters to disgruntled museum-goers, teenagers to those who think they’re being funny.

Paint, rocks, acid, knives and even lipstick have been known to cause damage to paintings and sculptures. Outdoor sculptures tend to take the brunt of defacement and cruelty as well.

One example, ‘The Little Mermaid,’ nestled on the beaches of Copenhagen, has been victim to not one, but two beheadings in the last 50 years. The first occurred in the mid-1960s as part of a political protest. The original head, which was sawed clean off, has never been found. The replacement head was decapitated in the 1990s, and though the culprits were never caught, they returned the mermaid’s head a month later anonymously.

3) Theft

An estimated 90 percent of all art theft involves inside personnel at the museum. Nearly $752.5 million worth of art was stolen in the U.S. in a five-year span. Forty percent of all art theft takes place in the UK, while 19 percent of theft occurs in the U.S.

The most vulnerable collections are stolen directly from private homes, making up 52 percent of all thefts. Only 10 percent of art theft occurs at art galleries and other similar facilities, like museums.

Though that’s a small percentage, museums should not skimp on their anti-theft security or insurance. Cultural property theft is the fourth largest crime category worldwide; it adds up to $3 billion to $5 billion each year.

4) Gaps in loan agreements

Museums and galleries often display artwork loaned out to them by private collectors or other museums. Sometimes, museums may sign an incoming loan agreement that asks them to take on more liability than their insurance policy covers, leading to gaps. If something were to happen, museums would be on the hook for damages.

Increasing temporary policy limits is one solution, though the trouble comes in when a museum’s curator doesn’t know there is a gap to begin with. Reviewing all insurance policies during any loan period is a priority when it comes to displaying a special exhibit.

5) Accumulation of values

It’s risky for museums to keep all their valuables in one location. If they split up their expensive artifacts and paintings, museums are spreading their risk and thinking proactively about preservation. That way, if one building or one hall suffers an incident, not all of the art is in the path of risk.

But many museums have massive values all in one building or even in one single gallery, which opens them to massive losses if something were to occur.

6) Fire

There’s no question that the items held in museums are vulnerable to burning. Even items held in fire proof cases are susceptible to smoke and ash damage. Art can’t be replaced, and restoration can be costly.

With volatile wildfire seasons growing and extending each year, museums need to keep an eye on both internal and external causes of fire risk.

Museums are starting to invest in other methods of fire-proofing outside installing smoke detectors and sprinklers inside the building. Getty Center in Los Angeles is a great example. It is a fortress of art, with travertine stone walls, a crushed stone roof and irrigation pipes used to saturate the earth in case of a fire outbreak.

7) Transit

Art is a privilege, not a right.

Museums and private art collectors generously loan out their Picasso’s, Van Gogh’s and Monet’s, because these precious pieces of art connect us to the history of the human race. These million-dollar pieces are sent back and forth all over the world just to be put on display.


But by allowing other galleries and museums to display the artwork they’ve purchased and kept safe, art collectors open up their possessions to the horrors of transportation risk.

Theft, accidents and weather top the list of transit issues, not to mention poorly packaged art bumping around in the back of a trailer or cargo plane. Those moving the precious material may not be adept in handling such goods, and human error can lead to some pretty catastrophic losses. Plus, the art needs to be warehoused in certain cases, and finding a storage unit that’s temperature controlled is imperative.

During transit, it is vital that careful evaluation, packing, shipping and documentation be used to prevent damage and loss. This is, by far, the riskiest activity art can undergo, so keeping track of every step of the process can help mitigate potential loss. &

Additional risks submitted by seven-time Power Broker® winner Mary Pontillo, national fine arts practice leader, SVP, Dewitt Stern — a Risk Strategies Company.

Autumn Heisler is the digital producer and a staff writer at Risk & Insurance®. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.


That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.


Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

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