Dispatches From ‘Business of Art Observed’: Get Insurance, Don’t Buy a Painting From a Dictator’s Wife

According to professionals in the field, working in fine art insurance is not at all like 'The Thomas Crown Affair.'

Visitors to last year's Dallas Art Fair. (Photo: Mei-Chun Jau)
The business of insuring works of art is both complicated and fascinating. Mei-Chun Jau

On Tuesday, at Observer’s inaugural Business of Art Observed event, one of the most intriguing discussions centered around insurance and risk management involved in art sales and art collections. While the panelists discussed insurance practices generally, they also shared the advice they’d give to individual collectors who are looking to expand their collections, or otherwise lend out their work to museums.

In an increasingly digitized world, where major life events and significant interpersonal exchanges are just as likely to happen online as they are in the physical realm, the art business gets more complicated. For example, buyers may first come across their new favorite artist on Instagram, or a collector might use cryptocurrency to facilitate the acquisition of a painting or sculpture.

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Overall, the purchase and shipment of tangible art objects is a labyrinthine and nuanced process—one that necessitates a whole host of professionals specifically tasked with getting the job done seamlessly. Say you’re interested in buying a painting. What could go wrong?

“Depending on the scenario, what we encourage our clients to do is understand what their risk vulnerabilities are,” said Laura Patten, an art and finance specialist for the professional services network Deloitte. “Is it reputation? Is it legal? Is it authenticity? All of those issues come up with the processing procedures on the front end.”

If you’re unsure who exactly you’re buying art from, and therefore going into business with, doing your research should always be a priority. “Just because you’re buying something from a trust, that doesn’t mean that you can’t use some pretty widely available and not overly expensive databases to figure out who the beneficial owner is,” Patten continued. “That’s not to say that everything should be public to everyone, but if you buy a piece of art from a trust and then you find out it belongs to a dictator’s wife who’s committing human rights abuses and it’s on the front of The New York Times, that’s a bad thing.”

Ronald Fiamma, global head of private collections at global insurance company AIG Incorporated, said that people often assume his life is similar to the plot of The Thomas Crown Affair (a movie where a museum’s insurance representative falls in love with an art thief), but this isn’t at all the case. Fiamma’s work largely entails making sure artwork that’s put in transit for museum exhibitions arrives intact, with all the proper paperwork in order.

“Our job is to make our clients whole,” Fiamma said when discussing the ramifications that might occur if (hypothetically) a client loaned work from her collection to a museum, where it got damaged in the process. “If the piece is hanging in a museum and someone pokes a finger through it, that’s accidental damage. Should it be after hours and the museum staff get drunk and they’re playing Frisbee in the gallery and throw it through a painting—this actually happened—in that case the museum should be responsible.” 

A word to the wise: Whether or not you’re planning to buy—or even look at—art in the near future, please, for the love of God, don’t get drunk at the Whitney and throw a projectile through a Toyin Ojih Odutola piece. I’ll never forgive you!

Dispatches From ‘Business of Art Observed’: Get Insurance, Don’t Buy a Painting From a Dictator’s Wife