What role do collectors have to play in a post-pandemic world and how does insurance play into it?
In such uncertain times, it’s important to remain optimistic and also be pragmatic. This is true particularly in the art industry, which is notoriously volatile at the best of times.
The landscape is shifting daily and being a professional patron of the arts means being able to move parallel to that shift. So how has the world of art collecting been affected by COVID-19?
Of course, many collectors have more to worry about right now than acquiring new pieces and have pressed pause on their engagements until it’s clearer what kind of an overall economic impact the virus will have.
There are many more, however, for whom collecting is more than an occupation – it’s a way of life.
For these individuals, there is an obvious solution for getting creative with how they share and expand their collections – personally curated digital art auctions and exhibitions.
Along with the rest of the world, the art market has pivoted by necessity in recent months to a ‘virtual viewing’ model.
Of course, going digital is something that has been in the back of the minds of dealers, collectors and auction houses for years but that’s mainly been focused on marketing, not exhibiting.
Online viewing rooms, however, have become far more common thanks to the impact of COVID-19, with major art fairs such as Art Basel Hong Kong and Frieze in New York forced to cancel and instigate an online-only affair.
The real question here, however, is will collectors and buyers be willing to spend money on pieces they haven’t physically seen and how is that going to reflect on art insurance going forward?
The statistics would seem to suggest it’s looking good, with Sotheby’s reporting $2.5 billion in sales for 2020. As a whole, however, online sales only represent a fraction of the market ($5.9 billion out of $64.1 billion).
Coronavirus is not causing specific damage to art spaces – whether that be galleries or individual collections.
Interruptions are occurring in regular business as a result of the virus though, which means many collectors might be making business interruption loss claims.
It is also limiting the number of exhibitions being put on and that means collectors that would normally make their living from loaning their pieces to museums and galleries are left at something of an impasse.
There’s also the fact that many galleries and museums will have had to increase their insurance limits due to COVID-19 due to a number of factors.
For example, a museum might end up hosting exhibitions because pieces have effectively been stuck there and then there’s the cancellation cover to consider.
This means that any fine art collectors lending their pieces out need to ensure that a new certificate of insurance has been issued for the new terms and that museums can confirm they continue to have adequate limits for all artwork on loan to them.
Whilst the lockdown period has seen collectors show increased interest in virtual sales, buyers need to ensure they have an insurance policy which allows them to continue to acquire works during a keen period of purchasing.
The key to any insurance policy is flexibility and ensuring cover is available for art in transit where collectors decide to sell or restore a piece ready for sale.
Ultimately, fine art insurance coverage is an incredibly specific business that requires a delicate and experienced hand.
That’s why it’s absolutely necessary, particularly in these tumultuous times, that all art collectors have a specialist fine art insurance policy that works for them and takes into account all of the twists and turns that the coronavirus pandemic continues to throw our way.
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