One morning in April, Katja Zigerlig woke up to find sunlight streaming into her New York apartment and touching upon a painting on the wall.
Instead of reposing in bed, as some might have done, she sprang into action, installing a shade on the upper tier of the north-facing French-style window to keep her artwork shielded from the potentially damaging rays.
“When I originally hung the painting in January, I made certain that no sunlight would hit the painting, and the painting is over one metre away from the window. Obviously, the sun changes its course over the year and I have to adapt to protect the painting from gradual deterioration or fading,” she said.
Ms. Zigerlig is not your average art collector. As assistant vice-president of fine arts, wine and jewellery insurance for the Private Client Group division of Chartis Inc., her livelihood depends on being able to foresee how a valuable object’s treatment can affect its worth.
According to Chartis, the global art collecting market is worth $50-billion (U.S.) a year, with strong sales expected in 2010. In February, Alberto Giacometti’s bronze sculpture Walking Man I sold for a record $104-million at a Sotheby’s auction in London. Increasingly, buyers are looking at art collecting as an investment rather than a hobby.
Unlike stocks and bonds, an investment in art can and should be protected, Ms. Zigerlig says. She recommends collectors contact an independent insurance broker, who can give impartial advice about different companies and their coverage, including private collections insurance, which has more sophisticated coverage than regular home insurance policies.
With increasing demand and rising prices comes increased risk of theft and fraud. The FBI estimates $6-billion worth of art changes hands each year on the global black market.
Last week at the Museum of Modern Art in Paris, five paintings by Picasso, Matisse, Braque, Léger and Modigliani valued at $120-million were slipped out a broken window in the night. The museum’s alarm system had not been working properly since March, French officials said.
While theft is a concern, for most art collectors, the bigger threat is human error, Ms. Zigerlig says. A painting hung too low behind a dining room table could be bumped by a chair, for example, or damaged by smoke if hung over a fireplace. A statue placed at a busy corner could be knocked over by a running child.
She recalls a client who lost a valuable piece of his collection to an open window: “The wind came in and knocked over this Picasso ceramic.”
Sharlene Locke, president of personal insurance practice at HUB International Ontario Ltd., says collectors of fine art should look for an insurer with an art expert on staff, who understands art and is up to speed on current trends. A policy that will offer current market value, along with coverage while a piece is undergoing restoration, is important, she says.
Jewellery collectors should look for a policy that includes a 150-per-cent replacement clause and offers a cash settlement instead of replacement, Ms. Locke says. “You can’t replace an heirloom but you can buy something else.” For wine collections, she recommends a policy with coverage for vibration and temperature change.
Each province has its own insurance brokers’ association, which can help connect clients with brokers. Ms. Locke also suggests asking friends and neighbours for referrals.
“You want a broker who understands your lifestyle. It’s not unusual to have expensive jewellery, art or more than one fur coat. Also, many times, the affluent have multiple residences, either throughout Canada or internationally, so dealing with a broker who has international capabilities is important,” Ms. Locke adds.
