As art markets draw increased attention with record-setting auction prices, wealthy individuals and families are increasingly turning to valuable collections of paintings, sculptures and other classes of fine art for investment diversification as well as aesthetic enjoyment. Christie's reported 2014 sales of art and collectibles of $7.7 billion, the highest auction house figure in the history of the art market, once again shined a spotlight on art collections as a dynamic asset class.
But these families don't always manage the physical risks to these items with the same rigor they employ when managing financial investment risk, leading to a "blind spot" in their overall asset protection plans. Advisors have an opportunity to counteract this behavior and deepen their client relationships by helping clients understand these risks. Based on an analysis ACE Private Risk Services conducted of fine art property claims for the last two years, three risks account for 75% of all reported loss activity. Here they are:
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