Art Loss – how, when and why
As we head towards the end of year, we briefly reflect on the 3 main ways you lose art.
“This is a robbery!”
Sneakily dressed as police officers, two men entered the Isabella Stewart Gardner Museum in Boston at midnight following St Patricks day in 1990, overpowered the guards, and managed to get away with 13 priceless pieces of art. This included ‘Storm on the sea of Galilee’ by Rembrandts and ‘The Concert’ by Vermeer which is considered to be the most valuable stolen painting in the world. A reward of $5million is still offered for its return more than 20 years following its disappearance.
Most people aren’t aware but Art Theft is the 4th largest type of criminal activity following drugs, money-laundering and hearing ‘let it go’ from Frozen again (actually sale of illegal weapons).
The majority of stolen art ends up being converted into its money value equivalent, at a value between 3%-10% of its estimated legitimate value. To put this in perspective, I can steal a Streeton worth $50k, and trade it to a criminal for a chico roll and Big M.
The most devastating part of all this is that majority of the art pieces stolen in a heist remain a mystery and are never seen again (some experts suggest the recovery rate is only 15%.
At least Art Insurance can cover this.
Fire and water damage are culprits. Paintings are notoriously susceptible to both.
Do you remember Superstorm Sandy in New York? The heart of the art world in New York is Chelsea. Two years ago, floodwater crept up the streets of Chelsea, eventually reaching five feet deep in some spots. The damage was catastrophic, with some estimates putting it as the largest ever insurance loss for art.
Art Insurance can and did respond, although when you read some of the articles, you can see that you need a good Broker (like us of course!) to get you good cover, otherwise the devil is in the detail.
If you are the recipient of stolen art, you have to return it and tough luck on recovering your original money. You can go back to the person/entity that sold it to you, but if they have no money or are unreachable then you lose your money.
You may have read about the National Gallery of Australia (NGA’s) purchase of an Indian artefact, the Dancing Shiva, and allegations it was looted from a temple and sold to the gallery with false papers.
The NGA gallery said that a November meeting of the Council agreed on steps – including the appointment of an independent reviewer and boosted staff numbers – to address ongoing issues over provenance in the 5,000 item collection.
There is insurance available to cover this but its hard to get and expensive.
Tips for 2015
- Before buying artwork make sure you know its history and source.
- Store your artwork in a secure spot. The safer it is the happier you will be. For SMSF’s this means external storage. For private collectors its yoru choice, but at least have alarm system.
- Purchase good quality Art Insurance. You want it to work with minimum fuss when the worst happens.
- Avoid listening to ‘Let it Go’
Have a safe xmas and New Year.
Self Super Insurance team.