The Art of Collecting During COVID-19

There is an art to buying art. Traditionally, for collectors, that typically included an in-person component at galleries, auction houses and fairs.

However, with COVID-19 shuttering many doors, the sale of fine art has shifted from an in-person experience to a virtual one. Following the emergence of COVID-19, the art world underwent years of digital transformation in only three short months.

Various industries are preparing to make long-term operational changes, and the art world is no exception. Though some would-be buyers remain wary, others are eager to add to their collections. Collecting art in the era of COVID requires a few crucial considerations and it remains vital that insurance agents and brokers are equipped to help their clients navigate this shift.

Below are three areas that should be top-of-mind for art collectors today.

The Economy and its Effect on Art

The uncertainty of the economy and its effect on the art market is likely weighing heavily on the minds of collectors.

However, fluctuation in the art market is common, so it is important for clients to continue obtaining regular appraisals for existing collections.

As part of this process, clients should seek a trusted partner who can help ensure existing and recently acquired pieces are properly appraised.

Why? Appraisals help a collector understand fair-market value and retail-replacement value, the latter of which is especially important for insurance purposes.

But not all appraisers are equally qualified. It is therefore imperative that agents and brokers advise clients to consult one of the three major appraiser organizations: The Appraisers Association of America, American Society of Appraisers, or the International Society of Appraisers. In today’s socially distanced environment, these organizations are equipped to do much of the necessary work virtually using technology.

Clients will also want to seek an appraiser who has experience with that particular kind of art as some specialize in different mediums and genres.

Finally, advise clients to avoid appraisers who charge a fee based on the percentage of the item’s value — that could suggest a conflict of interest.

Ensuring Provenance and Condition Virtually

Though some collectors are pausing further purchasing due to COVID-19, recent auctions and private sales suggest there is still strong interest among many buyers. While the medium through which a purchase is made might have changed, one thing has not — it continues to remain critical to seek provenance documents to understand ownership history. This helps to ensure that the seller has clear title, and the piece is what it is purported to be.

Clients should also obtain a condition report to understand any structural or surface damage issues, and to identify any prior restoration treatment — a normal request made even more important when a client is unable to view a potential acquisition in person. Conservators can act as the client’s “eyes” by completing a detailed condition report with high resolution photos. These two points are especially vital the older the piece is.

If a client is concerned with the piece’s provenance, they should consult with a researcher to ensure there are no issues. They can also check the Art Recovery International database or the Art Loss Register, which tracks lost and stolen art.

The Post-Purchase Safeguards

Following the purchase of a piece, insurance advisors should advise clients as they normally would, emphasizing the transportation process, which is likely to be different than pre-pandemic.

For example, depending on location, some art handlers may still be closed or experiencing a shortage in staff due to COVID-19. Given uncertainty, it is more important than ever that clients hire only reputable companies that specialize in transporting and storing valuable artwork. This includes ensuring the transport vehicle has air ride systems to reduce the risk of damage from vibration, is temperature and humidity controlled, and has a security system in place (inclusive of two drivers).

Once the piece has arrived safely, help clients understand how to keep their valuables safe. From a risk management perspective, this includes recommending they hire professional art installers and advising them against displaying artwork in high traffic areas of the home or underneath a bathroom, HVAC vent, sprinkler head or water-using appliance.

Safeguarding clients’ new art acquisitions also involves an insurance discussion.

While some clients might be familiar with a valuable articles policy, relatively new art collectors might not understand why a standard homeowners policy is not sufficient. Once the difference is recognized, insurance agents and brokers should work with clients to find a valuable articles policy that offers worldwide protection with no deductible, automatic coverage for new items, and an agreed value feature with a market value enhancement. In the event of a covered total loss, clients will get 100% of the agreed value as a cash settlement, and if the market value of the item has increased, clients may benefit from inflation protection up to 150% of the itemized value, up to the policy limit.

Though COVID-19 has greatly impacted the art community, this change presents a unique opportunity for agents and brokers to add additional value to collector clients. After all, as the art world becomes more digitized, it is likely that digital buying will soon become the new normal and will be here to stay.

Doyle is vice president, art, jewelry and value collections manager at Chubb. She can be reached at: lmdoyle@chubb.com.

Topics Agencies COVID-19