1 T.Y.B.B.I.

SEM VI



1. INTRODUCTION

Insurance is a contract whereby, in return for the
Payment of premium by the insured, the insurers pay the
Financial losses suffered by the insured as a result of the
Occurrence of events. The term risk is used to describe
All the accidental happenings, which produce a monetary
Loss.
Insurance is an ethos in which a large number of people exposed to a similar risk
make contributions to a common fund out of which the losses suffered by the
unfortunate due to accidental events, are made good. The sharing of risk among
large groups of people is the basis of insurance. The losses of an individual are
distributed over a group of individuals.









2 T.Y.B.B.I. SEM VI

DEFINITION
There can be two approaches for defining insurance. One is functional
approach other is contractual approach.
FUNCTIONAL DEFINITION
According to Encyclopedia Britannica, Insurance may be defined as a
social device where by a large group of individuals through a system of
equitable contribution, may reduce or eliminate measurable risk of economic
loss common to all members of the group
CONTRACTUAL DEFINITION
According to Justice Tindall, Insurance is a contract in which a sum of
money is paid to the assured in consideration of insurers incurring the risk of
paying a large sum upon a given contingencies.
The risk becomes insurable if the following requirements are compiled with :
The insured must suffer financial loss if the risk operates.
The loss must be measurable in money.
The object of the insurance contract must be legal.
The insured should have sufficient knowledge about the
Risk he accepts.








3 T.Y.B.B.I. SEM VI

WHAT IS INSURANCE?
Mankind is exposed to many serious perils such as property losses from
fire and windstorm and personal losses from disability and premature death.
Although it is impossible for an individual to foretell or completely prevent their
occurrence but it is possible to provide against their financial affectthe loss of
property and earnings.
From the point of view of the individual the life Insurance may be defined
as a contract whereby for a Consideration amount called the premium, one party
(the insurer) agrees to pay to the other (the insured) or a beneficiary a particular
amount upon the occurrence of death or any other agreed event.
Insurance is the method of spreading and transfer of risks
Losses of few unfortunate are shared by and spread over to many
exposed to the same risk.
Assets created by the owner in expectation of future needs have a
value.
Losses of assets for any reason deprive the owner of the expected
benefits.
It acts as a form of a safeguard against misfortunes.
From the point of view of community life insurance may be defined as
a social device to make accumulations to meet uncertain losses
resulting from premature death or disability.







4 T.Y.B.B.I. SEM VI

PURPOSE AND NEED OF INSURANCE
As said earlier that the making is exposed to many serious perils which
risk the security of their belongings. The risk here means that there is a
possibility of occurrence of loss or damage to the property, it may happen or
may not happen. Insurance is relevant only in the contingency of uncertainty. If
there is no uncertainly about the occurrence of the loss it cant be insured
against:
Assets are likely to be destroyed or made non-functional due to perils like
firefloods, breakdowns, lightning and earthquake.
Damage to assets caused by any perils is the risk that assets are exposed
to.
Risk means possibility of loss or damage, which may or may not happen.
Insurance become relevant only if there is uncertainly of occurrence of
event leading to loss.
No uncertainly No insurance.
We can say that the human life value is an ongoing generating asset,
which can be lost on early death or disability caused by accidents.
Insurance doesnt protect the assets but only compensates the economic or
financial loss.
Basically insurance covers tangible assets but the concept can be
extended to intangible also.






5 T.Y.B.B.I. SEM VI

TWO BASIC PRINCIPLES TO MAKE INSURANCE
POPULAR
People are exposed to risk and the consequences of which are difficult to
borne by individual.
No one should be in the position to make the risk happen and take
advantage.

CONCEPT OF INSURANCE
The concept of insurance is that people exposed to the same risk come
together and all shares loss suffered by a few.
The insurance companies play a role of implementing the said concept ---
control in advance the shares in the shape of premiums and create a fund
out of which loss is paid.
Life insurance covers the contingencies and provides relief to the family
members in the event of death or retirement of the bread earner.
Insurance covers the risk of dying to early and living to long.








6 T.Y.B.B.I. SEM VI

KINDS OF INSURANCE
Insurance can be classified into two categories.
1. LIFE INSURANCE
2. GENERAL INSURANCE
LIFE INSURANCE
The subject matter of this type of insurance is human life most of the
insurance policies are combination of savings and securities. According to
section 2 (ii) of Insurance Act 1938 Life insurance is the business of effecting
contracts of insurance upon human life including any contract, where by the
payment of money is assured on death except death by accident on the
happening of any contingencies dependent on human life and any contract
which is subject to the payment of premium for a term dependent on human
life.
Life insurance is a contract where the person requiring and insurance
pays a consideration / premium to maintain a policy and the insurer promises to
pay a sum assured or a guaranteed amount on the happening of an eventuality. If
no eventuality occurs then the insured may be eligible for some bonus also.
GENERAL INSURANCE
All the types of insurance are called general insurance or non life insurance.
1. Marine Insurance
It covers the sea or marine perils. Perils are the cause of loss which is a
condition that may increase the chance of loss. Protection agonists marine
perils like sinking of the ships, capture by enemy, sea piracy etc.






7 T.Y.B.B.I. SEM VI

2. Fire Insurance
It covers the loss due to fire to the property like houses, shops,
goods, factories or godown etc. it covers the loss from fire and consequent
loss from such fire i.e. the loss of work due to stoppage of work due to
fire.
3. Liability Insurance
This type of insurance covers the risk of liability against third
parties, which an insurer might have to pay under certain circumstances
e.g. injury to the property and/or person of a third person in road accident
or employers liability for an injury or death of a worker while performing
duty etc.
4. Social Insurance
This insurance is aimed at providing social security to the weaker
section of the society to the weaker section of the society. It may take the
shape of pension plans, disability or sickness benefits etc. the premium
may come from govt. employee and may also be shared by beneficiary.
5. Art Insurance
Insurance holds a lot of importance in today's world. One should
have insurance of house, self, besides health to fight against any probable
unpleasant events. Like other forms of insurance, art insurance is also of
utmost significance. Insurance for art gives protection to fine arts
collections against loss and damage caused by theft, fire, water or
breakage.




Art is a technique of communicationand the image is the most complete
technique of all communication.


8 T.Y.B.B.I. SEM VI

THE FUNDAMENTALS PRINCIPALS OF INSURANCE:-
The mechanism of insurance involves a contractual agreement in which
the insurer agrees to provide financial protection against a specific set of risk for
a price called as Premium. It is hence essentially an intangible product. The
insurance customer cannot see or feel the product he or she is buying. And
though the policy document does give the comfort that the coverage is on,
generally no real service is delivered until a claim occurs.
In normal commercial transactions, the legal maxim caveat Emptor,
Latin for let the Buyer Beware, operates. This means that the buyer takes the
risk regarding the quality or condition of the property purchased. This in turn,
implies that the buyer has the opportunity to examine the product before
purchase. Since, in view of what is started in the preceding paragraph, the
insurance customer has no such opportunity, insurance transactions need be
governed by special principles in order to protect the interests of the contracting
parties, particularly the customer.
It is in view of this that the contracts are governed by certain special
fundamental legal principles. These make insurance contracts very unique and
different from other kinds of commercial contracts. As we shall see below,
there are however, difference between life and general insurance with regard the
application of the principles. We shall indicate these in the course of the
discussions.





9 T.Y.B.B.I. SEM VI

THE FUNDAMENTAL PRINCIPLES ARE:-

1. THE PRINCIPLE OF UTMOST GOOD FAITH:-
The principle of utmost good faith, uberrimae fides (in Latin),
literally means perfect good faith or abundant good faith. The phrase is
used to express that an insurance contract must be in perfect good faith
concealing nothing. The principle is mostly discussed in the context of
the duty of the insured towards the insured, though it is equally applicable
to the insurers duty towards the insured.
From the point of view of the insured, the principle of Utmost
Good Faith could formally be defined as A positive duty to voluntarily
disclose, accurately and fully all facts material to the subject matter being
proposed, whether requested or not.

Principle of
Insurance

Insurable
Interest

Principle of
Indemnity

Principle of
Contribution

Principle of
Subrogation

Principle of
Loss
Minimization

Principle of
Causa
Proxima

Utmost Good
Faith


10 T.Y.B.B.I. SEM VI

2. THE PRINCIPLE OF INDEMNITY:-
The principle of indemnity, as applicable to general insurance
policies, means that the policyholder, after experiencing a loss, is before
the loss. The policy indemnifies him or guarantees that he would be
insuring his assets and recovering more than the loss. This is possible
since the economic value of an asset at the time of the loss as well as the
extent of loss can be determined and compensation payable determined
accordingly.
In case of life insurance, however, the economic value of a human
life cannot be measured precisely before death. It could in a fact be
unlimited. Hence, life insurance cannot strictly be a contract of indemnity.
This does not, however, mean a person can be granted life insurance for
an unlimited amount.

3. THE PRINCIPLE OF INSURABLE INTEREST:-
The second major principle of insurance is that of insurable interest.
The existence of insurable interest is an essential ingredient of any
insurance contract. Insurable interest is the legal pre-requisite for
insurance.
A common definition used for insurable interest is the legal right
to insure arising out of financial relationship, recognized under law,
between the insured and the subject matter of insurance.
It can be seen that insurable interest has three essential elements:
i. There must be properly, right, interest, life or potential liability capable
of being insured.


11 T.Y.B.B.I. SEM VI

ii. Such property, right, interest, life or potential liability must be the
subject matter of insurance.
iii. The insured must bear a legal relationship to the subject matter such
that he stands to benefit by the safety of the property, right, interest,
life or Freedom of liability. By the same token, he must stand to lose
by any loss, damage, injury or creation of liability.
4. THE PRINCIPAL OF SUBROGATION:-
This is another principle that is peculiar to general insurance.
Subrogation is the legal right of the person who has paid for the damage
caused by another to recover that money from the ship-owner.
Subrogation is thus the right of the insurance company that pays the claim
to recover the same from those who are responsible for causing the loss.
Contribution, in fact, is a corollary of the principle of indemnity.
5. PRINCIPLE OF CONTRIBUTION:-
The third principle that is peculiar to general insurance is Principle
of contribution. Contribution, again, is a corollary of the principle of
indemnity. Contribution implies that if the same property is insured with
more than one insurance company, the compensation paid by all the
insurers together cannot exceed the actual loss suffered. That is all the
insurers would together indemnify the policyholder for the loss suffered
and no more. If he were to collect insurance money from all the insurance
for the full value, this would violate the principle of indemnity, as he
would make a profit the loss.




12 T.Y.B.B.I. SEM VI

How does insurance work?
In very simple terms, insurance is a pooling arrangement whereby
contributions are collected from all members who join a pool. The amount so
collected is utilized to compensate members who suffer loss. The arrangement
works because general not all members who join the pool suffer losses. In order
to ensure equity a pool would consist of people who are exposed to similar risk.
As insurance evolved over the years, insurance companies have come up
to transact insurance business, which have developed expertise in assessing the
risk of an individual, a motorcar, a building or goods in transit. On the basis of
this assessment, they decide whether the asset offered for insurance could be
covered, and if so at what premium rate. In a sense they still operate pools since
they group together assets or person with similar risk profiles together for the
purpose of rating or charging premium. They also perform a number of other
functions including effective managing the funds collected that helps to reduce
the premium payable by policyholders.





Criticism is easy, art is difficult.



13 T.Y.B.B.I. SEM VI

ART

Q. What is ART?
It is not only expensive paintings; it also includes the fondness and love for:
Sculptures
Visual Arts ceramics, murals, works on paper
Antiques, Collectibles rare stamps
Vintage vehicles
It could be an object subject to value appreciation due to age, description,
history and rarity.
Art is a vital part of each nations heritage and as such carries a special
significance beyond its value as an asset. Artwork that was confiscated by the
Nazis or that changed hands as a result of forced sales touched a sensitive and
emotional cultural nerve. The United States recognized early in the Second
World War that art needed special protection from the ravages of the war.



14 T.Y.B.B.I. SEM VI

In the Monuments, Fine Arts and Archives units in the US Forces that
collected art in the chaos of the end of the Second World War, we created a
special responsibility for the United States for the return of art stolen by the Nazi
regime.
We are also aware of the implications unclear provenance has on
museums and the international art market. We have sought to be as inclusive as
possible in preparing for this seminar and for the Washington Conference. We
met with claimants, museums, art dealers, auction houses, researchers,
historians, non-governmental organizations in the US and abroad, and
governments to open dialogue and to seek areas of congruence on the resolution
of lost and stolen art from the Nazi regime.











15 T.Y.B.B.I. SEM VI

ART INSURANCE
Art needs to insured separately from ordinary contents. Only those things
that can be replaced with reasonable ease can be insured with ordinary
replacement value insurance. Art is not replaceable with reasonable ease. Art
is unique and original.
`Each art or antique item needs to be listed carefully on the policy.
Updated appraisals will be needed periodically. The owner is responsible for the
appraisal.
The insurer can repair or replace when damage or loss occurs.
Replace means to give the owner the money amount agreed upon in the
insurance contract. Repair means the insurer will provide enough money to
repair the item up to the agreed limit of the policy.
Insurance of art is based on a valuation that's acceptable to both the insurer
as well as the insurance company. As art becomes more and more valuable, art
insurance is absolutely essential. Valuation of paintings is based on market
feedback and individual collectors can avail of the policy as well. This is a new
market and so initially, art insurance is very expensive. But as more and more
people are looking at art as an investment, insuring one's collection is definitely
in order.


16 T.Y.B.B.I. SEM VI

Art is normally insured based on a recent
appraisal. The appraisal must be done by a qualified person. The owner can
insure the item at the appraised value or a lower value but not a higher value.
The insurance company and the owner agree on a value. Agreed value
is a legal and binding term. The insurer will pay up to the agreed value if the
item is lost or damaged. The insurer will not pay more than the agreed value
even if the market value has increased.
The agreed value of the art or antique item is the basis of the insurance
premium charge. The basic rule of thumb is $1.00 charge per $100 of value. The
actual rates can vary based on circumstances such as security and location.
Some items that are extremely valuable but not protected could be
uninsurable. A gold chalice left out on an alter in a church that is not locked
would be an example of an item that is uninsurable. The gold chalice should be
kept in a locked compartment or safe when not in use to be insurable.
Ordinary home insurance or commercial building insurance is not
designed to cover art and special items. Art, jewelry, antiques and other valuable
and unique items need to be insured with fine art insurance.
Fine art insurance is known professionally as Inland Marine insurance.
This is a very old term. Inland Marine insurance has developed over centuries


17 T.Y.B.B.I. SEM VI

with its own rules and limits. It has become the standard insurance for art,
antiques, jewelry, antiquities and rare items that are not replaceable.
What is the importance of art insurance?
Often art is bought for a lot of money as an investment or a hedge against
inflation, it is wise to insure these items in case they are stolen or damaged
reducing or eliminating their cash value to the owners.
Who needs Art Insurance?
From the art enthusiast to the first timer, if you are an artist who wishes to
insure the artwork you have created or if you are art lover who collects art, be it
paintings and/or sculptures, you need to protect the pieces you own. We also
cover period furniture, books, carpets, clocks, gold, silver, precious metals,
antique jewellery, maps, metal ware, militaria, musical instruments, objects
dart, objects of virtue, paintings, sketches, prints, philatelic, photography,
political memorabilia, porcelain, pottery, ceramics, glass, jade, scientific
instruments, statues, sculptures, sporting memorabilia, toys and more.
Why should you take out Art Insurance?
You need to protect your pieces against theft, damage & potential
reduction in value. Art collections can inflate in value rather quickly, if a
percentage excess is exercised by your current insurer, this could result in a
hefty excess at the time of a claim. Our private collectors policies have zero
excesses.
Once an Agreed Value has been set, it eliminates the possibility of your
investment actually costing you a loss in your insurance claim, if say; the art
investment has decreased in value. Your claims will not have the possibility of
average applied.


18 T.Y.B.B.I. SEM VI

What is your actual loss if 1 piece in a set is damaged?
If you own a collection of art that has increased in value because it is a
set and if one of the items is damaged or stolen, a conventional insurer will only
reimburse you for the value of that one item!
However, with Barrington, we will compensate you for your actual loss,
being the value of the individual piece lost plus the reduction in value of the set
because of this one missing piece.
How will you be compensated for the reduction in value caused by
restoration?
The duty of a conventional insurer is to put you back into your original
position before a claim occurred. If your art is damaged whilst insured on a
conventional policy, a simple restoration of your asset may be all that the insurer
is required and prepared to do. However, for the collector, the actual value of the
piece would have been severely reduced as any expert would be able to see the
restoration work done.
If your art is insured with Barrington, after the restoration is complete, an
independent valuator will assess the actual value you have lost and you will be
compensated accordingly.







19 T.Y.B.B.I. SEM VI

NEED OF ART INSURANCE:

The Scream

"The Scream" and "Madonna," two major paintings by famous Norwegian artist
Edvard Munch, were stolen several years ago from the Munch Museum in
Norway by armed robbers in broad daylight. The significance of the art theft is
notable, but what's really shocking is that the art was not insured against theft
(although it was insured for fire and water damage, for restoration costs that
would be incurred to repair the paintings if they were damaged). According to a
BBC news story, John Oyaas, managing director of the museum's insurers, said
of the paintings, "They are not replaceable so you can't buy 'The Scream' on the
street and put a copy up there. The focus is on other issues than insuring them.
To a certain extent this is common practice because these items aren't
replaceable."
Now according to the statement, Mr. Oyass appears to be saying that the
paintings are so valuable that they're not worth insuring, or put another way,
since the paintings are not replaceable, insuring them is a waste of money. This
thinking makes absolutely no sense. The museum should have had theft
insurance; all museums should have theft insurance, as should all art galleries
and private collections. Whether or not a work of art is "replaceable" is not the


20 T.Y.B.B.I. SEM VI

issue. The issue is getting compensated if the art is stolen. What's better-- a
stolen painting and a $5 million insurance settlement or a stolen painting and a
$0 insurance settlement?
World over investments in fine arts has grown over by 55% annually. The
possession of Fine Arts is a symbol of confidence, wealth, image and status.
Besides nowadays increasing terrorist activities are damaging many valuable &
antique collections. So for protection against the loss incurring from such
activities insurance are required.













21 T.Y.B.B.I. SEM VI

HOW TO BUY ART INSURANCE
Purchase as much insurance as you can do, whether or not that sum covers
the full value of your art. A majority of loss, damage, or theft hurts only to a part
of collection, and not the complete collection. So, getting some compensation is
superior to getting no compensation at all.
INSTRUCTIONS:-
1. Step 1
Speak To Your Current Homeowners Insurance Company.
Many people who own art cover it under their homeowners property
policy. It is always easier to extend a relationship rather than start a new
one so check with your current provider to see the options they provide.
The next step is for those who are not satisfied with the plan under
their homeowners. These tend to be those with larger, more valuable
collections.
2. Step 2
find an outside Art Insurance Specialist. If you have a larger collection
then a specialty provider may offer advantages that coverages under a
homeowners plan don't. The most common advantages are no deductibles;
coverage of recent purchases and less exclusion look for a specialty
insurer that is knowledgeable in the field. Some deal only with art and
collectibles but some companies, mostly high net worth insurers will
specialize in art and collectibles also.





22 T.Y.B.B.I. SEM VI

3. Step 3
Get your collection appraised. This can be either Step 2 or 3. It is
crucial to know how much your collection is worth in order to buy the
right coverage. Also, many times the company will offer discounts for a
collection that has been appraised in the last two years. After buying
insurance it is standard to have your collection appraised every 3 to 5
years as market prices often shift.
4. Step4
Determine How Much Coverage you really need. The art insurance
company will tell you that you need coverage at 100% of the value of
your collection. However, many people decide to insure for less. Usually
these are circumstances where the art is held in different locations, and the
owner doesn't foresee disaster in all places at once. Another instance is
when owners don't move their art, as most claims occur as a result of
moving damage.










23 T.Y.B.B.I. SEM VI

ART VALUATION
Art valuation, an art-specific subset of financial valuation, is the process
of estimating the potential market value of works of art and as such is a financial
rather than an aesthetic concern. Art valuation involves comparing data from
multiple sources such as art auction houses, private and corporate collectors,
curators, and specialized analysts to arrive at a value.
There are two different programs available to cover Fine Arts. It is important to
understand the differences in coverage and what is necessary to secure coverage.
Following are the two different policies which can be used to cover any Fine
Art:
Fine Arts (Scheduled) and
Species-Fine Arts and Library Collections (Unscheduled).
Following explanation describes the difference between these two
policies, the coverage available and the procedures for securing coverage and
reporting losses.
FINE ARTS (Scheduled):
A. GENERAL DESCRIPTION OF FINE ARTS POLICY:
It is only to be used as a guideline and is not inclusive of all of the
terms, coverages, exclusions, limitations and conditions of the actual
insurance policy. Specific questions and discussions regarding coverage
should be addressed through Campus Risk Management or the Office of Risk
Services.



24 T.Y.B.B.I. SEM VI

B. NAMED INSURED:
All corporations, partnerships, joint ventures, organizations, and
other entities, as have existed or as now or may hereafter exist, or for which it is
required to or has agreed to maintain insurance, including any affiliated,
associated, allied, and subsidiary entities.
C. TERRITORY:
Coverage is provided worldwide, except for the following countries:
Israel, Iraq, Iran, Afghanistan, Albania, Bulgaria, Libya, Liberia, Cuba, The
Czech or Slovak Republics, Hungary, Poland, or any of those territories
formerly comprising and known as the Union of the Soviet Socialist Republics
and the former country of Yugoslavia. The countries listed above are excluded
as a result of the known existence of art theft rings and the high frequency of art
theft.
D. LIMITS OF INSURANCE:
Permanent Collections and Exhibits $50,000,000 at any campus
location (per loss) $20,000,000 at any other location or in transit $20,000,000
earthquake aggregate per campus $50,000 sub-limit for film Property of
Others Foreign Transportation and Exhibits $5,000,000 any one loss.
F. COVERED PROPERTY:
Permanent Collections Works of art, including paintings, etchings,
drawings, (including their frames, glasses and shadow boxes), pictures, statuary,
rare books, manuscripts, rugs, tapestries, and other bona fide works of art, or
rarity, historical value, or artistic merit, including:
Property of the Insured.


25 T.Y.B.B.I. SEM VI

Property of others on extended loan to the Insured for a period of six
months or more.
Property of others offered as gifts to the Insured or for sale to the Insured
and while awaiting formal acceptance by the Trustees.
The Insureds interest in residuary gifts and jointly owned property, but
only to the extent of the Insureds interest therein at the time of the loss or
damage.
G. COVERED PERILS:
Permanent Collections and Exhibits all risks of physical loss or damage
from any external cause, except as excluded.
Property in Transit all risks of physical loss or damage from any external
cause, including Overseas Transit.
H. PERILS EXCLUDED: Following are the various exclusions which are not
covered under any art insurance policy:
Natural ageing.
Gradual deterioration.
Inherent defect.
Rust/oxidation, moth, vermin, warping, shrinking.
Loss during repairing, reframing, restoring, retouching.
Aridity, humidity, exposure to light, heat unless caused by fire,
storm/ frost etc.
Loss by collusion of partner, director.
Inventory loss.
War and war like activity.
Terrorism





26 T.Y.B.B.I. SEM VI

I. VALUATION:
Property of the Insured shall be valued at the current market value of the
property at the time any loss or damage occurs. The loss or damage shall
be determined according to such current market value.
Property acquired or to be acquired by the insured as a gift or under wills
or similar requests shall be valued at the current market value at the time
the loss or damage occurs. The policy will not cover such property
beyond the companies interest therein and in the event of loss of such
property, the interest of the company at the time of the loss shall be that as
stipulated in the will, bequest, contract or other document executed
between the company and the owner of the said property.
Property of others loaned to the insured and which the insured has been
instructed to insure, or for which the insured may be liable, shall be
valued at amounts agreed upon by the insured and owners. In the absence
of an agreement, the insurance policy will not be liable beyond the current
market value of the property at the time the loss or damage occurs and in
no event for an amount in excess of that specified in the policy.
J. IN THE EVENT OF A LOSS
All losses shall be promptly reported to the Campus Risk Management
Office and the Office of Risk Services, Office of the President.
All incidents involving theft or vandalism should also be reported to the
campus and/or local police department.
Take reasonable emergency measures to mitigate any further damage.







27 T.Y.B.B.I. SEM VI


SPECIES-FINE ARTS AND LIBRARY COLLECTION

A. General Description Of Species-Fine Arts And Library Collection:
This policy provides coverage for unscheduled and miscellaneous items
that are not reported under the Fine Arts Insurance Policy described above. The
coverage described below is a summary of the insurance policy; however, it is
only to be used as a guide and is not inclusive of all of the terms, coverage,
exclusions, limitations and conditions of the actual insurance policy. Specific
questions and discussions regarding coverage should be addressed through the
Office of Risk Services.
B. Named Insured:
All corporations, partnerships, joint ventures, organizations, and other
entities, as have existed or as now or may hereafter exist, or for which it is
required to or has agreed to maintain insurance, including any affiliated
associated, allied, and subsidiary entities.
C. Territory: Coverage is provided worldwide.
D. Limit Of Insurance:
This policy provides limits of $1,000,000,000 excess of a $1,000,000
deductible. Claims falling within the $1,000,000 deductible will be covered and
subject to the following schedule of deductibles.
E. Covered Property:
All forms of -
Fine Art of any nature or description and


28 T.Y.B.B.I. SEM VI

Library Collections of any nature or description, including but not limited to:
Volumes, serials received currently, personal manuscripts, UC archival
manuscripts, other archival materials, maps, microfilm reels, micro cards,
microfiche, microprints, pamphlets, government documents, audio discs,
audio cassettes, audio reels, compact discs/digital audio, videotapes,
videodiscs, multi-media kits, motion pictures, filmstrips, pictorial items, 35
mm slides, computer tapes, monographic CD-ROM discs, serial CD-ROM
discs and floppy discs.
COVERED PROPERTY INCLUDES:
1. Property of the Insured.
2. Property of others on loan to the Insured.
3. Property of others offered as gifts to the Insured or for the sale to the Insured
and while awaiting formal acceptance by the Insured.
4. The Insureds interest in residuary gifts and jointly owned property, but only
to the extent of the Insureds interest therein at the time of the loss or damage;
all of the above being part of, and known as the Insureds Permanent Collection,
while on exhibition or otherwise, and while in transit worldwide.
5. Property of the Insured or property of others loaned to the Insured and which
the Insured has been instructed to insure, covering said property on a wall to
wall basis from the time the said property is removed from its normal
repository, incidental to shipment, until returned thereto to or other point
designated by the owner or their agent prior to return shipment, including while
in transit and while on exhibition or otherwise worldwide.
F. Covered Perils: All risks of physical loss or damage from any external cause,
except as excluded.



29 T.Y.B.B.I. SEM VI

G. Perils Excluded:
Wear and tear, gradual deterioration, moths, vermin, inherent vice, or loss or
damage sustained due to or resulting from any repairing, restoration or
retouching process.
War; invasion; acts of foreign enemies; hostilities (whether war be declared
or not); civil war; rebellion; revolution; insurrection; military destruction or
damage to property under the order of any government or public or local
authority.
Shipments by mail unless registered first class mail or parcel post provided,
however, such shipments by parcel post shall not exceed the sum of $1,000
(USD) in value.
Against loss or damage to property shipped under on deck Bills of Lading.
Nuclear reaction or radiation, or radioactive contamination.
Earthquake, landslide or subsidence.

Note: The Species-Fine Arts and Library Collection insurance does not insure
loss caused by Earthquake, which is included under the Fine Arts Insurance
Policy.
H. Valuation:
1. Property of the Insured shall be valued up to the current market value of
the property at the time any loss or damage occurs in respect of non-
scheduled property.
2. Library contents of the insured shall be valued as per the scheduled limits
set forth in the policy.
3. Property acquired or to be acquired by the Insured as a gift or under will
or similar bequest shall be valued at current market value at the time the
loss or damage occurs.


30 T.Y.B.B.I. SEM VI

4. Property of others loaned to the insured and which the insured has been
instructed to insure, or for which the insured may be liable, shall be
valued at amounts agreed upon by the insured and owners.
I. In The Event Of A Loss:
1. All losses shall be promptly reported to the Campus Risk Management Office
and the Office of Risk Services, Office of the President.
2. All incidents involving theft or vandalism should also be reported to the
campus and/or local police department.
3. Take reasonable emergency measures to mitigate any further damage.












31 T.Y.B.B.I. SEM VI

PROCEDURE FOR CLAIMING INSURANCE POLICY:
Along with the increasing portfolio comes the increased possibility of claims.
It is very important to arrive at an understanding as to
How to handle these claims, so that the insureds must
have some confidence about the company.
Basis of indemnity at inception. This is necessary for the healthy growth
of the business.
KINDS OF CLAIMS
1. Total Loss Claims (no great difficulty in settling this).
2. Partial Loss Claims (this needs attention).













32 T.Y.B.B.I. SEM VI

FOR CORRECT SETTLEMENT OF CLAIM THE
FOLLOWING STEPS ARE REQUIRED:
1. Reporting of Claim: -
Claim has to be reported to the nearest claim office. Online, SMS
facilities are also available for such. In case of theft & fire, claim intimation
should be submitted along with the FIR & Fire Brigade report respectively. In
both the general & special cases, claim form has to be duly filled up manually
or online.
2. Appointment of surveyor:-
General surveyor is usually hired for estimating the loss in case of
books etc. Specialist surveyors are required for dealing in fine arts because
general surveyors have no expertise in quantifying the loss.
Internationally, art market experts are employed for assessing these losses.
After claim is reported surveyor will go through the policy papers &
valuation report, then the assessment of the loss was made. But in cases
such as theft, burglary etc investigator is appointed & also the claim is not
settled unless & until the final police report is received.
3. Expertise of the Experts:-
A panel of the best experts available locally who are well respected in
India and are consulted routinely by the international Fine Arts Institutions
like, The Christies and Sothebys. The experts are used for the purpose of
valuation at the time of inception of risk as well. The value that has done the
valuation before commencement of risk is usually not appointed as surveyor
for assessment of claim amount.
In case insured not agreeing with the assessment done by the expert,
one more expert may be used in consultation with the insured. Experts


33 T.Y.B.B.I. SEM VI

have their own fee and insured should have a discussion with them to arrive
at mutually acceptable fee. In case of partial losses where the insured wishes
to surrender the work, artwork can be sold after restoration, in the secondary
art market. Essentially the assessment of Fine Arts claim is a negotiation
between the insurance company, the expert, and the insured.
PARTIAL LOSS AGREEMENT:-
In case of partial loss agreement due to perils insured against, the amount
of loss shall be the cost and expense of restoration including additional charges
insured in connection therewith. The assured and the underwriters should agree
upon depreciation, if any, after restoration. In the event if the assured and the
underwriters does not agree on the amount of depreciation, property is to be sold
at public auction and the net proceed goes to the account of the assured.
Underwriters have to pay the assured the difference between the amount so
realized and the insured value of the property. In no event shall underwriters
be liable for more than the insured value of the property.
Besides following are the other points a policy holder has to keep in
mind before filing a claim for partial loss:
i) SPECIAL PROVISION:
It is a condition of this insurance that the assured to the best of their
ability, will provide for the property insured hereunder to be packed, unpacked
and shipped by competent and or professional packers and shippers.
ii) NO BENEFIT TO BAILEE:
It is hereby warranted that this insurance shall in no way insure directly or
indirectly to the benefit of any carrier or other bailee.
iii) BUY BACK AGREEMENT:
In the event of loss hereunder, for which underwriters have made payment,


34 T.Y.B.B.I. SEM VI

underwriters agree to offer the assured first choice of buying back the
recovered property if the property is recovered within two years from the date
of settlement. It is agreed that underwriters may request an amount no higher
than the amount, which was paid by them when the original claim settlement
was made less any deductible, if applicable.
iv) COVER:
The property described in the attached schedule (the Schedule) is
insured against physical loss or physical damage occurring during the period of
insurance while at the named location(s) or within the territorial limits specified
in the Schedule, subject to the following exclusions, basis of valuation and
conditions.












35 T.Y.B.B.I. SEM VI

TYPES OF ART INSURANCE
In this type of insurance, various things are covered by various
companies. There are various types of insurance policy which are related to art.
Which are listed below:-
1. FINE ART INSURANCE
2. JEWELRY & ART INSURANCE
3. PUBLIC ART INSURANCE
4. ART GALLERY INSURANCE
5. THEFT INSURANCE
1. FINE ARTS INSURANCE
Fine Arts Insurance covers the fine arts collections against loss and
damage brought about by fire, theft, water or breakage. Under the artwork
insurance items such as wine, rare books, antique furniture, sculpture, paintings,
jewelry and more alike are included. A number of art insurance policies also
offer certain additional services.
People with wide-range of art collections should own a fine art insurance
policy. The reason being the home owners' insurance cover usually will not
cover broken or lost items. They do not provide worldwide coverage and have
restrictions on transportation besides off-site storage. There are for all intents


36 T.Y.B.B.I. SEM VI

and purposes two types of fine arts insurance covers. These are: scheduled
covers and blanket covers. With scheduled policies, every item is independently
listed on the policy for a confirmed insured amount.
An experienced fine arts insurer also must possess worldwide contacts,
including appraisers, conservators, adjusters, shippers, packers, besides global
warehouses. These contacts can be more than ever important at the many
decisive moments. In the event of a loss that involves serious smoke or water
damage. For example, having instant access to an expert conservator can swiftly
steady the affected object, and in turn, may reduce the amount of permanent,
long-term harm besides loss of worth to the work of art.
All in all you need to protect your artwork collection by getting every
item in it registered by the Fine Art Registry. You need to get it appraised by an
art dealer so that you have a clear idea about the amount of coverage required
for your collections, before speaking to any agent offering insurance for art. If
you have a small home collection, get it covered under homeowner's insurance
policy. Otherwise contact the artwork insurance companies for more coverage of
larger collections.
2. JEWELRY & ART INSURANCE
The insurance is specifically designed around the risk of the piece,
although most personal lines products covers this in the market today, it does
appear that these pieces are added to your normal day to day all risk cover with
the exact same limitations and excess.




37 T.Y.B.B.I. SEM VI

Who needs Jewellery Insurance?
All people who have jewellery pieces. If are in the market of obtaining
or purchasing jewellery from engagement to wedding bands to necklaces to
earrings, you will need this cover. You will need this cover if you own any
completed manufactured jewellery or designer jewellery with the exception
of raw materials, gems or gold bars.
Why should you take out Jewellery Insurance?
Any completed manufactured jewellery or designer jewellery (except for
raw materials such as gold bars and gems) does not only have its own value but
also has its own personal value. Should an incident arise where your priced
designer pieces are damaged or stolen, one would prefer the claim to be handled
and settled in the most professional manner.
3. PUBLIC ART INSURANCE
This insurance is for the fabrication and installation of public artworks. It
offers general liability coverage for the artist during the fabrication, installation,
and/or the exhibition of the work. You can elect to cover the artwork itself as
well.





38 T.Y.B.B.I. SEM VI

What is public art liability insurance?
It's liability coverage that protects you against claims for damage to a
location or injury to a spectator or innocent bystander during fabrication,
installation, and exhibition. Do note that this does not automatically include
coverage for damage to the artwork itself, so you're covered if the art hurts
someone but not if someone hurts the art. That's a separate policy.
4. ART GALLERY INSURANCE
An Art Gallery Insurance Policy or Gallery Insurance Policy is a package
policy typically combining General Liability, Property Insurance and fine arts or
offering them separately to maximize coverage options and minimizing pricing.
Majority of the art galleries all over the world settle for art gallery
insurance. They take one or the other type of art gallery insurance policy to
protect their valuable works of art.

One needs to know that art needs to insured separately from regular
contents in the gallery. Only those stuffs which may be replaced with practical
ease may be insured with regular replacement value insurance instead of art
insurance. Bear in mind that art cannot be replaced with ease. It is not only
unique, it is original as well. So it requires insurance for art only.


39 T.Y.B.B.I. SEM VI

5. THEFT INSURANCE:-
Theft Insurance covers burglaries and robberies.
Burglary is defined to mean the unlawful taking of property
within premises that have been closed and in which there
are visible marks evidencing forcible entry. Robbery is
defined as that type of unlawful taking of property in which
another person is threatened by either force or violence.
Who needs Theft Insurance?
Most businesses need this insurance. More often than not, general
insurance policies cover basics and this cover will protect you over items and
stock that has not been specified on other policies.
Why should you take out Theft Insurance?
Having to replace items can be incredibly costly and it is often cheaper to
insure items than having to replace them. It also gives you peace of mind
knowing that your business is protected.









40 T.Y.B.B.I. SEM VI

INSURANCE COMPANIES COVERING ART
Several insurance companies provide coverage for fine art:
CHUBB GROUP
"Chubb's Masterpiece Valuable Articles policy, valuable items are covered
anywhere in the world with no deductible. Whatever possessions you insure,
you will have the choice to repair, replace, or keep the cash."

ATLANTIC MUTUAL
Atlantic Mutual's Valuables Policy provides broad coverage for fine art.

AXA ART
"AXA Art is the only globally operating specialty art and collectibles
insurance company offering tailor-made coverage solutions for private and
corporate collections, museums, galleries and artists."

TATA AIG PRIVATE CLIENT GROUP
Tata AIG Private Client Group provides coverage for fine art and rare
antiques.

Indian insurance market is experimenting with the niche concept of art
insurance. In the last 5 years, the Indian art market has grown more than
500% in sales. Affluents, young entrepreneurs, who choose art as an
investment opportunity, and an upward trend of the Indian art-work
collectors are the key drivers of growth for art market.
Insurance potential lies with art traders with stock value up to Rs 50 crore
as it is completely untapped. We feel that only 10-15% of potential in this
segment has been tapped yet. We have a comparatively small portfolio, yet


41 T.Y.B.B.I. SEM VI

a profitable one, says Rajive Kumaraswami, head-risk and re-insurance,
ICICI Lombard GIC Ltd.
Some estimate that the value of art that can be insured in India totals to
about $1 billion. This has an estimated accretion of about 5% per annum.
At these levels, we estimate the premium potential of the art insurance
market to be about Rs 150-Rs 200 crore overall, says Gaurav Garg, MD
and chief executive officer, Tata AIG, general insurance.
Art insurance generally covers the risk like damage during transit,
restoration and framing. There are risks associated with handling the piece
of art within the premises of a gallery which can also be covered. It
extends covers to natural perils, accidental damages and terrorism damage.
The target customers for the art insurers may be art galleries, art auction
houses, art funds, art warehousing service providers and private collectors.
Private players like ICICI Lombard, Tata AIG and Bajaj Allianz are the
key players in art insurance in India. Profile of the insured, location,
security measures and past loss history are some of the underwriting
parameters regarding this policy.
Art insurance is yet to catch up due to the challenge of valuation which
may differ among different valuators. As insurers require the exact price of
the asset, it usually becomes difficult to ascertain the sum insured
applicable. Also, artworks such as paintings of sculptures require high
maintenance in terms of the care taken and security, due to which insurers
may be reluctant to take on this risk, says TA Ramalingam, head-
underwriting, Bajaj Allianz General Insurance.



42 T.Y.B.B.I. SEM VI

VARIOUS ARTS WHICH ARE INSURED:



LOUVRE- The biggest museum in the world situated in FRANCE




43 T.Y.B.B.I. SEM VI

OSLO Museum of Norway




Famous NATURES painting kept in Louvre





44 T.Y.B.B.I. SEM VI


Famous ABSTRACTS made by PICASSO



The Sad Face- By Picasso
Ship of Fools (painted c. 1490
1500) is a painting by
Hieronymus Bosch which shows
prodigal humans wasting their
lives instead of spending it in
"useful" ways. The painting is
dense in symbolism.





45 T.Y.B.B.I. SEM VI


Magnificent works of the great Leonardo Da Vinci


Various Vintage Cars that are insured with Art Insurance policy



46 T.Y.B.B.I. SEM VI

ART INSURANCE IN INDIA.
There is opportunity for fine arts insurance business in India, China and
Eastern Europe. These countries are culturally rich and have created a large
amount of wealth. There are various private collectors of fine arts. Prices of fine
arts are high and so its protection is also very important. For instance, a painting
which is worth a million dollars would definitely require insurance because any
harm done to this painting will definitely be a great loss to the owner.
There has been a spurt in demand for contemporary Indian arts. The work of the
Indian artists are creating market for the potential buyers, leading to the
collection of those valuable works which should be insured for protection
against any loss. Besides there is an exponential growth in transactions and
investments in work of arts in India. Also, the pre and post war Indian Art is
much in demand.













47 T.Y.B.B.I. SEM VI

10 STEPS TO KNOW HOW TO OPT FOR ART
INSURANCE.
1. Do I need art insurance?
Every owner of art will know the value [financially and emotionally] that he
places on his art. Whether you are the artist who wishes to insure the artwork
you have created or if you are the art lover who collects art, be it paintings
and/or sculptures, you need to protect the pieces you own.
Not only owners need to be aware of art insurance -but also those involved in
the safekeeping of other people's art. Art insurance is required to protect from
financial loss. Everyone, from the first time art buyer, the art enthusiast, the art
collector, the artist and the gallerist should insure their art.
2. What can be insured under a policy for art insurance?
Art insurance covers a much wider spectrum than many of us might be aware of.
Insurance can be purchased to cover period furniture, books, carpets, clocks,
gold, silver, precious metals, antique jewellery, maps, metalware, militaria,
musical instruments, objects dart, objects of virtue, paintings, sketches, prints,
philatelic, photography, political memorabilia, porcelain, pottery, ceramics,
glass, jade, scientific instruments, statues, sculptures, sporting memorabilia, toys
and more.
3. How much insurance do I need for my collection?
There is no simple answer to this question as it will depend on the circumstances
and the needs of the specific owner.
You will need to determine the value of your collection, probably by having it
professionally appraised. You may also choose not to insure the entire
collection; instead, you could simply cover the more valuable pieces.
It is important to keep in mind that art collections can inflate in value rather
quickly and that the required cover might vary from year to year.




48 T.Y.B.B.I. SEM VI

4. How much will art insurance cost?
This might vary significantly between insurers and are dependent on the items
and their value to be insured. The cost of the insurance changes if there is an
added risk. Examples of risk would be the chance of the work being stolen,
damaged or lost and the cost to recover or repair the work. The costs will also
differ depending on where the art is to be kept or displayed. You might need to
insure your work both at home and for exhibition. We would like to advise that
you compare both insurers, cover and pricing through thorough consultation.
5. What else do I need when insuring my collection?
When searching for the correct insurance, it is well worth coming prepared. We
would like to advise that you collect and gather the following for your file:
An inventory list. You should compile a list of specific pieces you wish to
insure if you are not insuring your entire collection.
Proof of provenance. When you acquire a piece of valuable art, you
should be given some sort of certification of its origin. It may be included
as part of the original invoice, which you should also keep.
Photographs of the artwork. Not only do you need to prove you owned the
work, but you must also show the condition it was in at the time of
purchase [before it might be damaged or stolen].
6. What are the typical claims under Art Insurance Policies?
Whether you are a serious collector or individual who owns one or two major
pieces, you need to know where the financial vulnerability lies.
"The most common financial risk to art is not theft but fire, accidental damage
and ownership disputes," says Gordon Massie, MD of Artinsure, underwritten
by Hollard, who specialise only in insuring art, memorabilia and antiques.
The most common & most expensive claims are:
Theft
Physical damaged pieces
Art work lost in fire or floods.
Accidents that arise when the works are handled, transported or installed.


49 T.Y.B.B.I. SEM VI

According to Massie: "Our Art insure claims records confirm that in South
Africa fire is probably the greatest catastrophic risk facing your client regarding
their investment in art, antiques or collectibles. And it's not only destruction by
fire itself that is the problem. Damage from smoke and fire-fighter's water can
seriously depreciate the value of your client's assets.
7. What records do you need to keep about your art?
Not only are records needed when insuring the works of art, but also in the
unfortunate event of having to submit a claim.
Holly Alaimo of Dragonfly Gallery suggests the following:
Keep any sales receipts
Collect any additional paperwork that speaks directly to the value of your
art.
Take a photograph of the art and keep it in a security box
Have an antique piece assessed by an antique evaluator
When a piece is by an up-and-coming artist, collect information on that
artist and add it to your insurance packet.
It is best practice to review the artwork in your collection annually. A video
camera can be an important tool to document your possessions.
8. Does your insurer understand that art often needs to be in transit?
In South Africa, most claims on works of art arise from physical damage during
transportation of the work and from theft of the work. The frequency of
accidental damage loss is on the rise due to the amount of assets in transit on
SA's roads as well as the condition of our roads.
Example: An Ardmore Vase purchased for R200 000 at auction in October in
2008 in Cape Town arrived in Johannesburg with a chip on it. First indications
are that after restoration it will be worth R60,000 a loss in value of R140 000.
Insurance against this type of risk is vital to a collector and is not the type of
cover one receives as a matter of course. This situation is an example of the need
for specialist insurance that includes cover for decrease in value as a result perils
of this kind.Art not only needs to be transported for displays, but also for
restoration and reframing. Most conventional insurers panic at the thought of


50 T.Y.B.B.I. SEM VI

such valuable items being transported, and impose illogical and costly security
measures and inflated premiums.
9. Is your insurance structured using the average clause or on an agreed
value basis?
On what basis is your works of art insured?
Normal insurance, such as conventional householders insurance is subject to the
average clause. Art insurance typically uses an agreed value basis.
What is an agreed value of insurance?
The agreed value basis is an agreement made between the insurers and insured
that the payment for damage or loss of an item will be the value of that item.
If your art is insured on a conventional householders or commercial policy, your
claims will be subject to the average clause. This means that if your art
investment has increased in value since your last insurance valuation, you may
be under insured when a claim arises and the money paid to you will be less than
the actual value of the artwork.
10. Why and when might it be important to consider a specialist art
insurer?
Specialization might be important for the serious collector in the event of an
emergency. This could include:
Experienced backup by a team of people with the expertise to react
quickly and appropriately to minimize loss.
Specialization could provide both capacity and knowledge.
Your insurer must be able to assist you in understanding your insurance
policy and the fine print.
A specialist insurer may assess your risks and reduce them where possible
Example: In the event of fire smoke damage penetrates layers of paint to
different levels, depending on heat. This requires expert and sensitive restoration
work. However, despite the most careful restoration, an art asset is likely to
depreciate in value by up to 35%.



51 T.Y.B.B.I. SEM VI

PAINTING THE FUTURE OF ART INSURANCE

Niche insurance provider, Pavilion Insurance, announces the launch of Art
guard, a brand new art insurance solution for owners of art and collections
throughout the UK. The policy covers theft, loss and accidental damage and
damage in transit for a wide variety of art ranging from paintings and drawings
through to glass and conceptual sculpture.

Marketing Director Giles Rees said Many home contents policies dont cover
art unless pieces are specified on the policy and this can often lead to a sizeable
increase in premium. This is confirmed by recent research by specialist
insurance company Hiscox, who revealed that 80% of art collectors do not have
adequate cover for their collections and 30% have never sought a valuation.

He goes on to say Art guard has been created to provide a specialist art
insurance policy which not only offers a cost effective alternative, but also
provides other features which will directly benefit art collectors and
enthusiasts.

One of these benefits is the ability to buy new items and have them
automatically covered under the policy for 7 days, without having to specify or
inform Artguard that its been bought.

Other Artguard cover elements include loss of value and temporary removal
cover. The policy features no excess on claims.

To cover 5,000 of art would cost just 49 for the year. Buyers can get instant
quotes and purchase cover online choosing to pay by credit card or direct debit.







52 T.Y.B.B.I. SEM VI

Fine Arts Insurance - Indian Trends:
Wo r l d over investments in Fine Arts have grown over by 55% annually
Prices in Indian Art have risen by 20 times since 2001
Last year leading London auction houses reported 106 million of sales of
Indian Art
Projection for the year 2011 double the figure
Mahisasura by Tyeb Mehta was sold for a record 835,000 in
2009, 3 years back the same work was sold at 57,000.
Bust of Maharaja Duleep Singh was sold in the year 2007 for which the
asking Price was 25,000-35,000. But later a private Indian Collector
bought it for 1.7mn.













53 T.Y.B.B.I. SEM VI

UNDERSTANDING ART INSURANCE
1. Homeowner's Insurance Policy might be ideal for those with antiques and
colltibles worth a few thousand dollars. But a homeowners policy has
exclusions and deductibles. Art insurance companies usually adopt a Risk
Prevention Strategy to protect against any risk, such as damage or loss.
2. A Specialty Policy has broader coverage. It involves different valuations
(such as) aggregate, current value and loss limit values to underwrite a specific
type of collection.
3. The High-net-worth Coverage is favored by leading art insurance companies,
such as Chubb, AIG Private Client Group, AXA Art Insurance, and Lloyd's of
London, specializing in high-value art, antiques and collectibles.
4. Liability Insurance for Fabrication, Installation, and /or Exhibition of Works
of Art that Are in Public Areas is designed to cover static works of visual art
(sculptures, mainly) that are in the area accessible by the public.
5. A Valuable Policy is structured to supplement homeowner's coverage if you
have valuables that exceed $10,000, the Atlantic Mutual recommends
considering this coverage.
6. Ownership Dispute Insurance is a title insurance policy structured to address
the chair of title and lien risks inherent in art as a form of personal property. It is
a "Single premium, indefinite term policy." In other words, you pay once and
get protection for as long as you possess the art work.




54 T.Y.B.B.I. SEM VI

INSURANCE TIPS
For anyone, public or private, who owns expensive art:
Photograph and document your collection, or at least the most valuable
works in your collection. Include current appraisals, original sales
receipts, and any additional paperwork that speaks directly to the value of
your art.
Buy as much insurance as you can comfortably afford, whether or not that
amount covers the entire value of your art. Most loss, damage, or theft
affects only a portion of a collection, not the entire collection. To repeat--
receiving some compensation is better than receiving no compensation at
all.
Make sure you understand your insurance policy. This means reading the
fine print, and asking every question about every conceivable loss or
damage situation that you can think of. You don't want to find out after a
loss that you were not covered for that specific type of loss.
Theft/damage insurance for art, added onto your home insurance,
generally costs $1-$2 annually per $1000 of coverage (less if you have a
good security system in place). Several insurance companies specialize in
covering art and antiques exclusively. Coverage details can be discussed
and/or negotiated with your insurance company.
There's no excuse for not insuring an art collection. If you can afford the
art, you can afford the insurance. And remember-- you don't have to insure for
every last penny of value in your collection. Loss or damage rarely affects an
entire collection, and you'll find that in the large majority of cases, even partial
coverage will reimburse you for a substantial percentage of the dollar/rupee
amount involved in most occurrences.


55 T.Y.B.B.I. SEM VI

CONCLUSION
There is no reason for not having art insurance. True, it is quite expensive. Art
Insurance premiums typically range around 3-4% of the face value of the art.
While it seems like a small amount, in most cases, especially when the art in
question is worth millions, the premium is not a small amount. You need
insurance for your art because it is worth a lot of money. You need to be
protected against loss or damage to anything precious or of high value that you
might own. Often artwork is among the most expensive things that you own and
it is also easily damaged and art thefts are not uncommon.
Insurance against loss or theft of your art is the most common type of art
insurance and it is always a good idea to have a policy that covers this. It is quite
disheartening to lose your favorite and most valuable piece of art. In most cases,
premium for this type of insurance is quite high. Therefore, it is a good idea to
be at least partially covered.
Art insurance that covers damage is extremely useful to protect you in the
unfortunate event that the artwork is damaged. Usually damage policies cover
all causes such as transportation, natural disasters, fire etc. Repairing art,
especially sculptures is an expensive process as one would require experts to get
it done.
Overall art insurance is a very useful and in most cases necessary entity to go
with your art whether you are a dealer, private owner or owner of a private
gallery. The best you can do is to choose the policy that you feel is right for you.
Art insurance is expensive but that is no reason not to have it. The importance of
it undermines the price and if you can afford a very expensive piece of art you
can just as well afford the insurance for it!



56 T.Y.B.B.I. SEM VI


Website:-

www.google.com
www.wikipedia.org
www.Google
www.Yahoo