Museums get expanded insurance
American museums have caught a break on the insurance premiums they must pay when they borrow hugely valuable artworks for public display.
California museums in particular could benefit from an expanded federal insurance program, to be administered by the National Endowment for the Arts, because the coverage will include earthquake premiums that can be far more costly than those for loss and theft.
Since it was established in 1975, the Arts and Artifacts Indemnity Program has enabled museums to minimize the cost of insuring works that come from overseas by applying to the federal government to guarantee the owners payment in the event of theft, damage or loss. Now, in addition to the $10 billion reserved for the foreign coverage, a $5-billion pool has been created to protect art and artifacts lent to museums from within the U.S.
“This is one of the best things to happen in the museum field for a long time,” said Ford Bell, president of the American Assn. of Museums. For art museums, he said, extending the coverage to domestic loans was “the top priority.”
Since fears of terrorism increased seven years ago in the wake of the Sept. 11 attacks, insurance hikes have “threatened to strangle museums’ ability to present important art to the public,” said Joanne Heyler, director and chief curator of the Santa Monica-based Broad Art Foundation.
U.S. Sen. Dianne Feinstein (D-Calif.) helped push the bill expanding the coverage. Her spokesman, Scott Gerber, said Monday that Feinstein got involved last year after receiving reports that some California museums’ insurance costs were up as much as 300% because of private insurers’ post-Hurricane Katrina concerns about catastrophic losses.
Panels of experts will decide who qualifies for the domestic insurance. The objects to be insured need to be worth at least $75 million, and there’s a ceiling of $500 million. The museums will be responsible for deductibles ranging from $50,000 to $500,000.
The Los Angeles County Museum of Art has had “many, many exhibitions” covered under the foreign art loans insurance program, and the new domestic coverage “should be an enormous help,” Fredric Goldstein, the museum’s general counsel, said Monday.
The NEA estimates that museums have saved $250 million under the foreign insurance program. It typically insures 40 to 50 loans and exhibitions a year and has backed 57 this year.
In all those years, NEA spokeswoman Victoria Hutter said, the government has had to pay for just one damaged work and for two paintings by Israeli artist Reuven Rubin that were lost in transit from New York to Israel in 1982. The Rubins were subsequently recovered.