Of all the things collectors think about when they buy art–price, provenance, condition, art history, or even wall space–the last thing on their mind is where they might store the work if and when it needs to be put in storage. It turns out, that when your insurance company thinks about your art–how much it is worth, the security in your home, who’s there and when–the last thing they think about as well is where you might store your art if and when you need to put it in storage.
This odd oversight is the key to why art storage is the biggest–and least recognized–threat to your favored works. Because it turns out that a collector will pour over catalogues, inspect a painting closely and quiz dealers on its value but when it comes time to put their best pieces away for a while, they make the decision by calling a friend and choosing the cheapest option. What makes a storage facility appealing to a collector is more about its convenient location than the security of the facility.
AXA Art Insurance discovered this in dramatic fashion in the aftermath of Hurricane Katrina. Though the insurers had boots on the ground long before emergency workers gave the all-clear, AXA discovered that its highest loss was not in a downtown gallery or a looted private residence. The claim came from a collection left mouldering in a sub-standard storage facility. The firm didn’t even know the art was there.
Why? Since art insurance is designed to cover works when they’re traveling either to and from a dealer’s gallery or from a collector’s home to a museum exhibition or even as an owner shifts works among various homes, the policy doesn’t require the insurance company to know the art’s exact location. Unfortunately, a substantial portion of art losses occur during storage. Over the last three years, that’s been between 5 and 10% for AXA.
This is one reason they developed their Global Risk Assessment Program (GRASP). “Better storage is a necessity to protect the works of art,” says Christiane Fischer, President and CEO of AXA Art Insurance Corp. “Remember, we’re safe-guarding cultural property. In that sense, advancing industry standards is a necessity. But it also just makes good business sense for us.”
To limit storage losses, AXA created GRASP to certify art storage facilities. And though there’s not yet an industry standard, AXA is hoping that their efforts will convince other leading art insurance firms–and some visible collectors–to adopt GRASP as well. GRASP consists primarily of a 1200-point questionnaire that gives an objective, one-page assessment of a facility’s suitability to store art, and which types of art.
So far AXA says that GRASP has been applied to 200 museum facilities and 100 art storage warehouses. The firm will inspect facilities a client uses for free to judge security against theft. Others can access the service for a fee. And the more detailed inspection against loss through damage, fire and other calamities comes at a slightly higher fee for clients and non-clients alike.
Though AXA has instituted the program out of self-interest, trying to minimize the losses it must cover, Fischer hopes the industry will adopt its standards for the sake of the art as well. “We’re pushing to improve standards because we believe everyone will benefit,” she says. “We’re already seeing that from results. A variety of other constituents in the art market have welcomed our efforts because they see a direct and positive effect too. But we’ve got to get that into the collector’s consciousness.”
For More Information on Managing Storage Risks