Insurers & Maritime Risk

Learn more about our October afternoon London based training workshop on art in international waters:  Managing the gap between marine and fine art & specie insurance.
Click below for more information. 

This is a photo of Mount Fuji in a superyacht mural courtesy of Winch Design
Photo: Courtesy of Winch Design
Art on Deck onboard Galactica Star Superyacht
Photo by David Churchill, Courtesy of Bannenberg & Rowell Design


Welcome back Webinar - Marine & Specie

Tactics for Managing Fine Art Risk at Sea
3rd September 2020 – Join our free webinar on risks for art and how insurers can assist the market with managing hazards. Pandora Art Services in association with David Brackenbury Associates. 
Please register your interest to receive m
ore information:

Supporting the insurance industry

Calculating risk for art on superyachts, despite being a niche and specialist area, is one with high penalties for getting it wrong. It goes without saying that the marine environment is potentially hostile and that art at sea needs a more detailed analysis as to the impact of losses. 

Pandora Art Services has started to work with the insurance industry helping to risk-assess schedules of assets to be taken on board and to investigate risk profiles with colleagues in the business. We also run workshops for brokers, underwriters and loss adjusters to alert them to the unique situations which might result in loss. We help them to understand how the value of an artwork can be upheld through conservation on board as well as legal risks.

Potential loss on watercraft is not limited to a few paintings on the wall valuable as they might be, it is also important to remember that there are a plethora of sculptures, decorative objects, and design pieces with delicate surfaces that can be expensive or impossible to repair. Indeed, many objects on a superyacht will be unique, even if not high value, and they may be treasured by the owner. They are also subject to differing risk profiles in comparison to works that are kept in land environments.

underwriters

Writing premiums: By attending our workshop, you will understand the risks that might apply and will be more confident in identifying where problems might occur and which exclusions to apply. You will understand solutions through trusted partners to assist with protecting and conserving objects on board and to determine best practice measures which underwriters might choose to specify. Getting it right in advance will mean fewer claims but when the claims do happen, it will be a smoother process to resolving them.

Underwriters will be better prepared to accept proposals from their Brokers

Claims: The claims process can be facilitated with more knowledge of the marine environment and can be resolved  more accurately through advances in technology and improved documentation. Claims is an expensive area, not least in irritation and admin time and difficulties in the negotiation and adjustment of claims puts a burden on all parties concerned. 

Loss adjusters

Similarly, for Loss Adjusters, an understanding of how and why artworks get damaged is useful knowledge on which to base decision-making supported by factual data. We cover different types of objects and materials and you will also learn how crew and staff that handle art can be trained to avoid damage. Much of the due diligence in the insurance ecosystem is about having good facts and clear communication – this is facilitated by sound knowledge of the risk profile and knowing what questions to ask.

Superyacht in Dubai Marina

Brokers

Brokers who are dealing first-hand with private clients find this knowledge is also useful in supporting and advising clients how to protect their art, but also in understanding what hazards and perils will not be covered under the policy. 

Brokers like to have fresh ideas to present to clients to show that they are alert and advising their clients so that they may look after their best interest.  This is where entertaining and informative lectures for Private Clients and those who work for them, whether for households or organisations can be a valuable bonus.  As for watercraft, captains crew, interior designers, shipyards or other parties to the build of the vessel, such knowledge is paramount in mitigating risk. It is recognised that the superyacht industry has many diverse areas in different locations where communication across all areas is not always feasible. This may mean that important knowledge about objects on board is lost and accidents occur which could otherwise have been avoided.

photograph of superyacht cruising at speed on the sea

Managing loss

Accidents are one of the top causes of loss in this sector. This usually occurs during the logistics and the transport of art on or off the vessel where inexperienced crew or technicians are involved who have not been trained to understand the owner as art collector, the nature of the vessel itself and moreover, the value and vulnerability of their treasured assets.

Annual policy renewal information can often be inaccurate; outdated valuations, incomplete schedules, artwork locations could be incorrect and missing condition data. While many insurers will renew policies of under £250,000 with little more than the Client’s best estimate, many are suffering unnecessary losses resulting from fraud and high value damage caused by a lack of education or training in how to protect the most valuable of pieces for clients and so suffer significant pay-outs as a result.

ifasic art and specie insurance conference logo

Supporting the insurance industry

Last year Pandora Art Services conducted two workshops at the IFASIC global art & specie conference in Antwerp where we shared new perspectives on the three key risk areas for fine art in specialist situations such as superyacht environments along with new solutions to support forensic analysis on claims and to inform pre-loss risk analysis.

As we all know, Art and objects falling under a HNW fine art & specie policy can be varied. They may range from snuff boxes to vast canvasses and monumental sculptures. They may comprise precious metals and stones or everyday materials, like paper or clay. Some are ancient, and others are the work of living artists. Others may be of a fragile or delicate nature. Nevertheless, the one thing that the owner-collector and the Insurer have in common is an overwhelming need for such pieces to be accurately valued, protected from loss or damage and preserved for generations to come. 

As the value of artwork is sometimes quite subjective, underwriters will assess premium calculation and claim pay outs on the following as agreed with the proposer:

  • Price at auction or market value at the time of a loss;
  • Purchase price;
  • Projected replacement cost/agreed value
  • Pre-loss valuations

It is vital therefore to have the best assistance in calculating not only the appropriate level of insurance cover, but also that clients are encouraged to take steps to ensure that their Art or artefacts are not damaged or lost through a lack
of knowledge or lack of care.

 

Superyacht Galactica Start Art on Yachts

Legal Export Risks

As insurers in the Specie area will be aware, ownership of fine art does not mean freedom to do what one wishes with it. Superyachts have had objects confiscated and destroyed because they have infringed export trade regulations. It is an area which gives Customs officers strong powers, and which may incur criminal penalties. Legal risks and moral rights infringements must be understood not only by insurers, but insurers must know that those with the burden of responsibility for the objects understand these risks: Captains, yacht managers, Crew and others working on board.

Regulations have been introduced by the EU requiring importers of items into EU territory legal export from their original country domicile it is important that the industry understands which criteria apply and how to be prepared for Customs who may board vessels with this in mind. Again, Customs across Europe and elsewhere will have legal powers to address any smuggling of cultural goods on yachts.

photograph of superyacht cruising at speed on the sea

courses and workshops for the insurance industry

Pandora Art Services offers both insurers and their clients practical training in the risks and risk management around how and why damage occurs and how to avoid the plethora of losses resulting in expensive and time-consuming pay-outs.  If clients can demonstrate that their staff have the necessary knowledge to know how to care for such art in all eventualities, we believe both pre- and post-loss transactions will become more efficient and cost effective with less friction.

A basic understanding of the art market and art in society is included to bring all delegates up to a common level of understanding necessary to enable decision making.

This means better control, compliance and comfort for the entire business chain – in fact, it applies to UHNW households and institutions as well as the marine lines.

 

Please sign up at the top of the page to register your interest both for our free webinar on 3rd September, and on our accredited courses, which will provide crucial training to ensure that those in whose care of these valuable pieces are entrusted to have the specialist knowledge to protect and care for such items.