The latest attempt to tame the wild and woolly world of art is a new brand of title protection insurance. Although various businesses and nonprofit organizations maintain databases of lost or stolen artworks and grapple with ways to guarantee authenticity, New York-based ARIS Title Insurance Corp. offers a policy designed to insure the ownership of works of art.
Six years in development and six weeks on the market, the new product is similar to real estate title insurance, said Lawrence M. Shindell, a Milwaukee attorney who co-founded ARIS six years ago with his sister, Judith L. Pearson, a former insurance executive who lives in Denver. Pearson is president of the company; Shindell is chairman and chief executive.
Their brainchild, art title protection insurance, "transfers risk to a third party so that people can buy and sell art with the confidence that there is not a World War II claim, an import-export issue or a lien or judgment against the artwork," Shindell said.
Other companies offer insurance for theft and damage. The new product focuses exclusively on ownership.
To get the business rolling, the company built a database of information about artworks likely to be subject to title disputes. The first entries were works with gaps of provenance during the period when Nazis confiscated art collections in Europe. Many other works with "risk characteristics" have been added, Shindell said, and the process has only begun. Prospective clients are expected to provide provenance information they have gathered; the company will do further research to assess the probability of title challenges.
Shindell said a $1-million painting with undocumented Nazi-era provenance would be assessed at a rate of 5% of the value, or $50,000, a one-time premium that would last as long as the owner kept the work. A higher-valued piece with a more secure title might cost less to insure. Owners of such nondeductible policies would be reimbursed for the value of artworks lost to title claims. The company can also work out short-term and deductible policies, Shindell said.
Who needs this insurance?
Nearly everyone who creates or owns art, Shindell and Pearson said, reciting a litany of domestic and legal situations that can affect ownership.
Who's buying it?
No one yet. But one application from a private collector arrived 24 days after the insurance was launched. It's under review.