Protecting art and collections for high net worth clients

New research¹ commissioned by specialist insurer Ecclesiastical has revealed three quarters (75%) of high net worth (HNW) clients believe they need to do more to protect their art and collections, up 9% on the previous year².

The survey of 250 HNW individuals who invest in art and collections found theft, accidental damage, fire, and damage in transit are their biggest concerns.

More than half of those surveyed reported their collections have suffered accidental damage (55%) during the past 12 months. And almost half said their collections have been impacted by theft (48%) and damage in transit (46%). A third reported malicious damage and vandalism (33%), fire (33%), and escape of water and burst pipes (32%) have impacted their collections during the past year.

The research discovered three in five (57%) have purchased replicas during the past 12 months. A third (35%) knowingly purchased replicas, and three quarters (74%) said they use these replicas to protect their collections.

High costs of purchasing the originals and using replicas to protect real items by using them as decoys were reasons given for knowingly purchasing replicas.

The survey found half (48%) had unknowingly purchased counterfeits during the past year. They discovered their items were counterfeit by finding out from others with expertise, noticing the poor quality, or reviewing the details themselves.

Research³ from luxury pre-owned watch retailer Watchfinder & Co reports over one million counterfeit watches are circulating in the UK and estimates 14% of British collectors have counterfeit timepieces in their rotations.

Dr James Lindow, Underwriting Director for Art and Private Clients at Ecclesiastical, said: “From an old master painting, to a modern sculpture, bottle of whisky, or wine collection, as a specialist art and private client insurer, we understand the importance of protecting art, collections, and valuable possessions. Our latest research has found over half of high net worth collectors have had their treasured assets impacted by accidental damage, while half have been impacted by theft and damage in transit. Brokers play an important role in helping high net worth clients understand the risks their art and collections face and in ensuring they have the right cover in place should the worst happen.”

• Make sure you have regular valuations and review your sums insured annually to ensure your possessions are insured correctly. Fast-appreciating items including jewellery and watches should be revalued every three years and those with more stable values, including fine art, porcelain and antiques, every five years.
• Transit of art and collections should be carried out by professional packers and shippers.
• If your art or collections are on loan to a gallery or exhibition contact your insurance broker in advance to ensure you have the right cover in place.
• Art and collections can be prone to damage form changes in the environment. When storing or displaying your art and collections, avoid placing them by fireplaces, radiators, heating pipes or vents. Avoid displaying or storing in direct sunlight, and avoid displaying your art and collections against walls which are susceptible to damp.
• Reduce the risk of accidental damage by avoiding displaying your art and collections in areas where they might accidentally be knocked, such as next to doors, shelving, and furniture or in busy corridors.
• Art and collections kept in storage should be kept off the ground to avoid the possibility of damage from dampness or standing water. Items such as paintings should not be stored against each other, to avoid dents and scratches. Thin boards should be placed between them.

¹ The research was commissioned by Ecclesiastical Insurance and conducted by BVA BDRC. Online interviews were carried out 14 - 25 May 2024 with 250 UK high net worth individuals with an income of at least £200,000 per annum or liquid assets of at least £1 million, and who have previously invested in at least one type of art / collection.

² The research was commissioned by Ecclesiastical Insurance and conducted by BVA BDRC. Fieldwork was conducted from 9 -27 July 2023 amongst 250 UK high net worth individuals with an income of at least £200,000 per annum or liquid assets of at least £1 million.

³ Over a Million Fake Watches Circulating in U.K., a New Report Finds (robbreport.com)