Protecting Collectibles from Hurricanes
When renowned art attorney Scott Hodes set out to transfer some artwork from his residence in Chicago to a newly purchased townhouse in Miami, he was surprised to learn that a number of art insurers in South Florida did not offer fine art insurance during the hurricane season.
Hodes, senior counsel at Bryan Cave LLP, also learned that the building of well-protected warehouses in the Miami area for high-end objects such as fine art was a booming business.
The warehouses allow collectors to store their valuables during hurricane season before having the art warehouse move the collectibles back to their residences between December 1 and June 1, when hurricanes generally are not a threat.
“The art warehouse business has really taken off in South Florida,” said Hodes.
Melissa Lalka, fine art manager of Chubb Personal Insurance for Chubb Group of Insurance Cos., said that her company “interacts with the growing number of warehouses storing fine art and other valuables in the South Florida market by having a number of specialists … inspecting warehouses.”
Chubb, she said, has a number of loss control features that it considers important when inspecting warehouses that its clients and prospective clients may consider doing business with. The insurer also keeps a database of preferred vendors for clients needing to use such services.
In that way, she said, “the insurer can be very nimble in being able to say what facilities are well protected.”
Also contributing to the growth of art warehouses is an increasing number of collectors who “buy and hold” art as an investment and who may not have the proper facility or the desire to house the art themselves, said Linda Sandell, Huntington T. Block’s chief underwriting officer.
“Most art storage warehouses provide two insurance options,” she said. “Either the warehouse will insure the collection and charge an additional fee, or the insured maintains their own [insurance] and signs a waiver for the warehouse.
“If the warehouse insures the collection, it is important for the collector to review the coverage to confirm that it is adequate for their needs, just as they would when insuring the collection through their own insurer.”
Huntington T. Block’s clients in South Florida include collectors of all sizes, as well as important museums, galleries, artists and conservators. ”With a well-planned executable disaster plan, fine art insurance is generally available and affordable, even in coastal areas, said Sandell.
“The important thing for clients,” said Jennifer Schipf, senior underwriter, fine art and specie at XL Catlin, “is that they really do their research to find a warehouse that not only specializes in fine art, and there are several wonderful ones in the South Florida area, but to also do their research among friends and peers to make sure they’re getting good recommendations and good feedback from people who have used the same warehouse they are considering.”
It’s also important to know what type of warehouse facility you are considering, Schipf noted. “If it’s a fine art warehouse, they should have climate control to protect art as much as possible,” she said.
Collectors also need to understand that most warehouses make sure they are not liable for loss of property of more than the required 60 cents per pound of property that they are holding, which only scratches the value of art these days, she said.
“So it’s absolutely critical that if clients expect to have insurance coverage when their artwork is in the warehouse that they secure that coverage themselves,” Schipf added.
Vanessa Amor, business manager for Museo Vault, a state-of-the-art insurance warehouse that stands dramatically against the Miami skyline, said the warehouse was designed to withstand the 200 mph winds generated by even the most powerful hurricanes. Art is also stored at least 35 feet off the ground to protect it from aggressive storm surge.
“Our art facility was built from the ground up four years ago in a state-of-the-art manner to the standards that were required by the insurance industry … to store the fine art and other valuables, such as antique furniture and sports memorabilia, among other things,” she said.
Amor stressed that Museo Vault was not a self-storage facility. It has a robust 24/7 security system. “You name the sensor, we have it,” Amor said.
“You can’t just walk in here to access your valuables,” she said. “Everything is very controlled. You have to have an escort with you at all times.”
Added Amor: “We can provide insurance if a client wants to obtain insurance for a particular work.”
She said that the idea for Museo Vault came after the busy 2005 hurricane season, highlighted by Hurricane Katrina.
In addition to Museo Vault, there are a number of other prominent art warehouses in South Florida.
Fortress Miami, which has been open for 30 years, recently completed an expansion and renovation of its private viewing gallery, which offers several options for displaying art depending on a client’s preference, day or night.
A similar facility, Robo Vault, opened up more recently in South Florida. Robo Vault has an area for storing wine and seven enclosed garages with a robotic arm to store and retrieve exotic and antique automobiles.