Insuring the Irreplaceable Insuring the Irreplaceable Against the UnthinkableAgainst the Unthinkable

ororWhy Would You Want Why Would You Want

One More Insurance PolicyOne More Insurance Policy

Rollie BoedingRollie Boeding

State of WisconsinState of Wisconsin

Laura CondonLaura Condon

Willis of MarylandWillis of Maryland

Session PlanSession Plan

Brief Overview of State of Wisconsin Brief Overview of State of Wisconsin Property Insurance Before July 2005Property Insurance Before July 2005

Overview of Fine Arts and Special Overview of Fine Arts and Special Collectibles Insurance CoverageCollectibles Insurance Coverage

Brief Overview of State of Wisconsin Brief Overview of State of Wisconsin Property Insurance After July 2005Property Insurance After July 2005

Wisconsin Property ProgramWisconsin Property ProgramBefore July 2005 Before July 2005

$16 Billion in Values$16 Billion in Values Included University of Wisconsin SystemIncluded University of Wisconsin System

$300 Million in Limits Per Occurrence$300 Million in Limits Per Occurrence $2.5 Million Per Occurrence SIR$2.5 Million Per Occurrence SIR $2.7 Million Annual Aggregate SIR$2.7 Million Annual Aggregate SIR Estimated $1.2 Billion in Fine Arts and Estimated $1.2 Billion in Fine Arts and

Special Collectibles ValuesSpecial Collectibles Values $1,652,000 Premium $1,652,000 Premium

Wisconsin Property ProgramWisconsin Property ProgramBefore July 2005Before July 2005

Fine Arts and Special Collectibles Covered Fine Arts and Special Collectibles Covered under Self-funded Programunder Self-funded Program

Transit Covered Under Marine Cargo Transit Covered Under Marine Cargo Policy with $100,000 deductiblePolicy with $100,000 deductible

Average Premium for Transit was $17,000Average Premium for Transit was $17,000 Major Concern Over Adjusting a Major Major Concern Over Adjusting a Major

Fine Arts LossFine Arts Loss

What Does a Fine Art Policy cover?What Does a Fine Art Policy cover?

It covers the items on your property program that It covers the items on your property program that “cannot be replaced with other items of like kind “cannot be replaced with other items of like kind and quality” and quality”

More specifically:More specifically: The expected:The expected: ““fine arts and collectible objects of every fine arts and collectible objects of every

description including but not limited to paintings, description including but not limited to paintings, etchings, drawings, photographs, ceramics, etchings, drawings, photographs, ceramics, sculpture, pottery, porcelain, rugs, tapestries, sculpture, pottery, porcelain, rugs, tapestries, statuary,”statuary,”

What Does a Fine Art Policy cover?What Does a Fine Art Policy cover?

And the perhaps unexpected:And the perhaps unexpected: rare books, coins, manuscripts,rare books, coins, manuscripts, other bona fide works of art, other bona fide works of art, rarity (natural history specimens and artifacts), rarity (natural history specimens and artifacts), historic value, historic value, or artistic merit, or artistic merit, and all associated property including but not and all associated property including but not

limited to frames, glasses, shadow boxes, crates limited to frames, glasses, shadow boxes, crates and other display equipment, and other display equipment,

What Does a Fine Art Policy cover?What Does a Fine Art Policy cover?

Property of the Insured;Property of the Insured; Property of others offered as gifts to the Property of others offered as gifts to the

Insured or for sale to the Insured and while Insured or for sale to the Insured and while awaiting formal acceptance;awaiting formal acceptance;

The Insured’s interest in residuary gifts and The Insured’s interest in residuary gifts and jointly owned property, but only to the extent jointly owned property, but only to the extent of the Insured’s interest at the time of loss or of the Insured’s interest at the time of loss or damage;damage;

Property of others loaned to the Insured which Property of others loaned to the Insured which the Insured has been instructed to insure.”the Insured has been instructed to insure.”

Fine Art CoverageFine Art Coverage

Additionally Fine art policies cover such Additionally Fine art policies cover such items:items:

On your premisesOn your premises At other unnamed locationsAt other unnamed locations While in transit While in transit WorldwideWorldwide

ValuationValuation

Current Market Value of the item or the Current Market Value of the item or the amount agreed to with the owner of the amount agreed to with the owner of the item.item.

Versus: Replacement Cost or Actual Cash Versus: Replacement Cost or Actual Cash Value or Scheduled ValueValue or Scheduled Value

Common MisconceptionsCommon Misconceptions In order to obtain a fine art policy you will need In order to obtain a fine art policy you will need

to:to: 1- create an itemized valued inventory that will 1- create an itemized valued inventory that will

have to be constantly up-dated and endorsed on have to be constantly up-dated and endorsed on the policy – wrong – coverage is blanketthe policy – wrong – coverage is blanket

2- have everything appraised first – wrong – 2- have everything appraised first – wrong – valuation is current market value at time and valuation is current market value at time and place of lossplace of loss

3 – We don’t have a state owned museum so we 3 – We don’t have a state owned museum so we don’t have any fine art – wrong every state has don’t have any fine art – wrong every state has some amount of fine artsome amount of fine art

Where are the fine art exposures?Where are the fine art exposures?

State controlled universities and collegesState controlled universities and colleges Special Collections section of state and university Special Collections section of state and university

libraries – huge value in rare books and manuscriptslibraries – huge value in rare books and manuscripts State archives State archives MuseumsMuseums Historical SocietiesHistorical Societies State Capital buildingState Capital building Offices and court housesOffices and court houses Governor’s MansionGovernor’s Mansion State owned research facilities State owned research facilities

Other BenefitsOther Benefits

Fine art rates are generally lower than Fine art rates are generally lower than property ratesproperty rates

Increased capacity at highly valued Increased capacity at highly valued locationslocations

Decreased TIV reported to the property Decreased TIV reported to the property marketsmarkets

Ultimately the cost of the fine art policy Ultimately the cost of the fine art policy might be offset with saving on the property might be offset with saving on the property policypolicy

More BenefitsMore Benefits

No need to individually report transit No need to individually report transit exposures on a open cargo policyexposures on a open cargo policy

Benefit of specialist adjustors, restorers Benefit of specialist adjustors, restorers and appraisers in the event of a lossand appraisers in the event of a loss

Very low deductibles – removing these Very low deductibles – removing these exposures from self funded retentions exposures from self funded retentions under the property programunder the property program

Where to startWhere to start

Review Property SOVReview Property SOV Identify known and potential locationsIdentify known and potential locations Discuss estimated TIV with Key LocationsDiscuss estimated TIV with Key Locations Ascertain estimated TIV at secondary locationsAscertain estimated TIV at secondary locations Top ten items at key locationsTop ten items at key locations Cope contained on SOVCope contained on SOV Facility reports and existing property inspection Facility reports and existing property inspection

reportsreports WebsitesWebsites

Wisconsin Property ProgramWisconsin Property ProgramAfter July 2005After July 2005

$17.2 Billion in Values$17.2 Billion in Values $300 Million in Limits Per Occurrence for $300 Million in Limits Per Occurrence for

Regular PropertyRegular Property $2.5 Million Per Occurrence SIR for Regular $2.5 Million Per Occurrence SIR for Regular

PropertyProperty $2.7 Million Annual Aggregate SIR for Regular $2.7 Million Annual Aggregate SIR for Regular

PropertyProperty Estimated $1.2 Billion in Fine Arts and Special Estimated $1.2 Billion in Fine Arts and Special

Collectibles Collectibles

Wisconsin Property ProgramWisconsin Property ProgramAfter July 2005After July 2005

Added Fine Arts CoverageAdded Fine Arts Coverage $300 Million Limits on Five Largest Locations$300 Million Limits on Five Largest Locations $80 Million Limits at Locations Owned, $80 Million Limits at Locations Owned,

Occupied or Controlled by StateOccupied or Controlled by State $50 Million Limits for Transit$50 Million Limits for Transit $10 Million Limits Unnamed Locations$10 Million Limits Unnamed Locations $50,000 Deductible$50,000 Deductible No Deductible for Transit or Away from No Deductible for Transit or Away from

Normal DepositoryNormal Depository $180,700 Premium$180,700 Premium

Wisconsin Property ProgramWisconsin Property ProgramAfter July 2005After July 2005

$600 Million Limits for Five Largest $600 Million Limits for Five Largest ExposuresExposures

$380,000 Million Limits All Other Locations$380,000 Million Limits All Other Locations

$1,470,000 Total Premium Including Fine $1,470,000 Total Premium Including Fine Arts CoverageArts Coverage

COMPARED TOCOMPARED TO $1,652,000 Premium Before $1,652,000 Premium Before

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