Art collectors in North America are increasingly wary of fraud and provenance issues as the primary risks to their prized collections, outpacing worries about damage during travel and natural deterioration, according to a comprehensive wealth report released by Chubb, a leading insurance company.
Investment and Collecting Trends
The report, based on a survey of 800 North American collectors, highlights that while most respondents collect items like fine art, jewellery, cars, and wine driven by personal passion, around 38 percent view these acquisitions as investments. The concern for the retention or appreciation of investment value emerges as a significant factor, with 87 percent expressing heightened worry about the risk of art fraud.
Art Fraud Takes Center Stage
The fear of art fraud takes precedence, with 87 percent of collectors surveyed citing it as their top concern, slightly surpassing worries related to damage during travel and transportation, which stands at 86 percent. The report emphasises that the perceived risk of making the wrong investment decision and the safety of parking money in art investments are pivotal factors contributing to this apprehension.
Recent Examples and High-Profile Cases
The report references recent instances of high-profile art fraud, thefts, and repatriations, including the seizure of a headless bronze statue at the Cleveland Museum of Art, the Metropolitan Museum of Art’s artefact return to Cambodia and Thailand, and the ongoing scandal at the British Museum over missing items falsely attributed to Norval Morrisseau.
Insurance Gaps and Legal Implications
While Chubb’s insurance policies cover legal fees and title defense, they do not provide protection against fraud itself. In cases where a work is revealed as fake or stolen, and subject to repatriation, the financial responsibility falls solely on the collectors. The article highlights a notable case involving 25 works attributed to Jean-Michel Basquiat, seized by the FBI, where the museum faces significant legal fees and repetitional damage.
Preventing Investment Loss
Chubb’s Division President for its North American Personal Risk Services, Ana Robic, advises collectors to mitigate fraud risks by purchasing from reputable sources, requesting provenance documentation, and consulting third-party experts such as forensic conservators. The emphasis is on proactive measures to prevent headline-grabbing investment losses.
Practical Concerns and Insurance Claims
The report underscores that, in reality, damage during travel and transport is a more likely scenario prompting insurance claims. Mundane incidents like spilled red wine or accidental damage during events are common reasons for restoration and repair claims. Proper installation, including reinforcement of walls and adherence to artists’ instructions, is also highlighted as critical to avoid potential losses.
Conclusion
The article concludes with a reminder that even smaller collections should be protected, emphasising the importance of professional advice, timely inspections, and adherence to best practices in the ever-evolving world of art collection and investment.
New Source: Art News
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