When a private collector agrees to loan artwork to a museum or art gallery for an exhibition, there are a wealth of benefits for both sides; the collector - as their asset has the potential to increase in value following the profile of the exhibition, and the museum or gallery having an opportunity to display new and previously unseen private works to enhance their exhibition catalogue and increase revenue.   

Entrusting a third party to look after some of your most valuable assets should be considered carefully.

At Lockton, we are used to checking and arranging cover for our clients whilst their works of art are on loan and, as part of our advisory approach, we consider a whole host of elements to ensure adequate protection remains in place including:

Borrower cover

  • This should be on an 'all-risks' basis (all perils included unless specifically excluded) and from 'nail to nail' or 'wall to wall' (covering the item from point of collection to return)
  • Cover for terrorism should be provided – including whilst in transit and on site (usually separately stated within cover terms).
  • The Owner should be noted as Loss Payee on the Borrower Insurance Certificate.
  • The title and value of an item are correctly documented, including currency conversion.
  • Timing of the loan cover should allow sufficient time for the item(s) to be picked up and whilst in transit to the venue and returned to the lender. 
  • Borrower Insurance cover should span the loan period (or diaried to check renewal completed).
  • Does our client have the option to maintain their own cover on a contingency basis?

Movement/Transit  Arrangements

  • Professional packers and shippers are being used and no waivers of subrogation are requested (preventing Insurers from attempting to recover losses caused during the loan/transit).
  • Opportunity for the client to approve the transport arrangements.
  • Condition checks are carried out before and after the loan period to document damage incurred as a result of a loan.

Loan Agreement Terms

  • Item and Lender details are shown correctly in line with above Borrower points.
  • Does the Loan Agreement adequately outline the environmental conditions to be maintained for protection of the asset.
  • Do terms allow for increases in value whilst on loan if for a long period of time, or multi exhibition tour – following a regular valuation, and also currency fluctuations, death of an artist etc.
  • Stipulating conditions – a lender can say how they want the piece to be displayed, i.e. on loan from private collection to maintain anonymity, as well as reproduction, permissions and intellectual property rights.
  • And last but not least……… the small print!

Some policies will automatically include cover for loaned items, up to a percentage or specific value of the  sum insured, but this should be checked carefully.

Where loans are regularly made, careful logging and tracking of this is essential to ensure dates of loan cover and contingency cover remain in place correctly.

This may seem a lengthy list of items to consider but at Lockton, it's what we do and it's one of the many ways we're different. We regard exceptional service and thinking beyond the obvious as standard. For every client, all of the time.