Aon and Axa XL have partnered to create a risk management guide for protecting art, from expansive collections to a single masterpiece. 

The guide – put together by Aon Principal Art & Collections Valuer Ben Ashley and Axa XL Head of Specialty for Australia Des Partridge – says museums face many types of risk ranging from natural disasters and theft to security breaches and conservation challenges.

The bespoke nature of museums means tailored insurance coverage is necessary, and museums and institutions are advised to maintain accurate valuations and updated risk mitigation strategies.

Standard Material Damage insurance policies, also known as Industrial Special Risks, may not adequately address the specific needs associated with insuring artwork. These policies often come with high deductibles or broad exclusions.

Specialised fine art policies typically offer more favourable terms, including nil deductibles, broader coverage and additional bespoke features like cover for transit and loans to other institutions, the guide says.

Investing in accurate valuations, robust security measures, and comprehensive emergency response plans for the safety of staff and visitors are “pivotal steps” to safeguard collections. In the event of a claim, meticulous documentation of appraised values aids in swift resolution and claims settlement.

Cybersecurity and data protection is also paramount as museums store sensitive details about patrons and donors, and cyber insurance can aid reputation preservation and financial recovery.

Specialised fine art insurance policies often rely on “agreed value”, which requires detailed recordkeeping to itemise and assign values to each object. These policies, however, also recognise that not all items may be individually listed and may cover un-itemised artworks at market value.

Reviewing the insurance policy’s “Basis of Settlement” or “Basis of Valuation” is also crucial to understanding how items will be covered in case of loss.  

An itemised database of all artwork and objects in the collection should be kept, and ideally be revalued every three-five years.

Aside from appropriate insurance, the guide says robust security systems, fire suppression measures, and disaster preparedness protocols all help minimise risks, and collaborating with experts in risk management can help museums devise customised strategies for particular collections, exposures and locations. 

See the guide here.