Topics covered:

Introduction

Property covered

Newly acquired fine art

Property not covered

Perils

Deductible

Options

 

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Introduction

 One of the more difficult things to determine is what exactly is a fine art. Do an insured's baseball cards, while valuable, constitute a fine art, or are they simply a valuable collectable? Fine arts are generally considered to be privately owned collections of high valued items such as paintings, etchings, pictures, tapestries, rare glass, small ornamental items, antiques, art glass, and other genuine works of art. Collectibles tend to be items that are somewhat rare and appeal to a large audience. Collectibles are often mass-produced items with a limited number of items still available, such as baseball cards or comic books.

 The form allows blanket coverage for unscheduled property, and coverage for scheduled property as well. Optional breakage of fragile articles coverage is available, and such items must be designated on the schedule.

 Property Covered

 A. Property Covered

We cover the property insured under this policy that is owned by an "insured" while it is anywhere in the world.

1.Scheduled And Unscheduled Fine Arts

a.We cover scheduled and unscheduled articles of fine art owned by an "insured" only if:

(1)An amount of insurance and premium is shown for that property in the Schedule above. The amount of insurance shown for such property is limited by Paragraph D.1. Loss Settlement in Common Policy Provisions Form PM 00 01;

(2)They are located at the address(es) shown in the Declarations; and

(3)You agree that if they are to be transported from such location, they will be

packed and unpacked by competent packers.

b.This class includes private collections of:

(1) Drawings, etchings, lithographs, paintings, pictures, tapestries;

(2) Art glass windows;

(3) Bona fide works of art such as:

(a) Valuable rugs;

(b) Statuary, marbles and bronzes;

(c) Antique furniture and silver;

(d) Manuscripts and rare books; and

(e) Porcelains, rare glass and bric-a-brac;

and

(4) Other bona fide works of rarity, historical value or artistic merit.

 Analysis

 Like most personal property coverages, this form covers scheduled property while it is anywhere in the world as long as it is shown on the schedule. The insured can travel with his fine arts, or loan them to exhibits, and the coverage follows. It is not unusual for private collectors to loan their collections to museums for exhibition.

 The loss settlement conditions that apply appear in the Common Policy Provisions, PM 00 01, section D.1. The scheduled form has no settlement provisions; it is designed to identify specific property and what the agreed amounts are and to be paired with the common provisions form.

 Section D.1 of the Common Policy Provisions form states that the value scheduled is not an agreed upon amount, but that the value will be determined at the time of loss. In event of a loss, no more than the lesser of four amounts will be paid: the actual cash value of the article at the time of loss, the amount for which the article could be reasonably repaired to its condition immediately before the loss, the lesser of the amount for which the article could be reasonably replaced with one substantially similar to it, or the agreed value of the item. This allows the carrier to return the insured to his pre-loss condition at the lowest cost to the carrier but still providing proper indemnity. It is important to make this clear to the insured; just because artwork is scheduled with an assigned dollar value does not mean that is what the insured will get in the event the artwork or part of the artwork is damaged or lost. The price of fine arts fluctuates with the market, and a work may have depreciated since it was added to the form.

 The location of the property must also be listed on the declarations; if property is to be exhibited, the carrier needs to be aware so it can be sure proper loss control measures are in force. Property that is to be moved from an insured location must be packed and unpacked by competent packers. Various types of art need to be packaged with certain materials and transported with great care. Some items may need to be kept at a particular humidity in order to prevent damage; others may need a particular type of packing material so as not to scratch the artwork.

 The form highlights types of items considered to be artwork; the list is self-explanatory and is not limited. Other works of rarity, historical interest, or artistic merit are covered even if they are not listed.

 Newly Acquired Fine Art

 2.Newly Acquired Fine Art