On the art market, a new type of insurance - insurance of property rights in a work of art

At this unpredictable art market or a collector can not be sure of his absolute ownership of their purchased works of art. Even if the transaction was lawful in all respects, the new owner is not protected from claims by previous owners - especially if the victims of the Holocaust or their heirs.

For many years the only preventive measure that could in this case take the owners, was a thorough investigation of the provenance. It was not until the appearance in 2006 the first company offering a service insurance ownership of works of art. Since this line of art-business development has been widely, especially in the context of the global rise in prices for works of art and the ever increasing flow of proprietary claims. Insurance companies are now able to protect their clients from both the restitution claims for bygone days of war, and the more trivial claims on their artistic property of the former spouse who refuses to pay child support.

For a premium of between one and five percent of the work (or more if it comes to work with a very dubious provenance, which most likely will be eligible heirs of Nazi victims), the company will cover the costs of the client, if the ownership of them try challenged in court, as well as reimburse him the cost of work, if he lose the case. Yes, these insurance policies come out quite expensive, but it's still just one of many items of expenditure related to collecting works of art (there is a property insurance, transportation, for example, 15-25 percent of the auction house commission).

insurance of property rights is of particular interest to those working in the evening the field of credit secured by works of art . One of them - a lawyer, Stephen Brodie, dealing with such art pledges in his firm. He compares the insurance of property rights to works of art with the same type of property insurance. The difference between them is that the ownership of the property must be registered in the state archives, while the buying and selling works of art are not always displayed in the public records.

Stephen Brodie does not consider Insurance of property rights panacea for all ills. However, it is definitely a calming effect on lenders that provide mortgages for multi-million dollar art collection and is not willing to risk their money if the borrower's property rights can be challenged.

In art, as opposed to from the property, there is another problem: to protect themselves from claims of other owners can, but to protect themselves from the work of authorship can not be challenged. If, for example, the pattern previously attributed to Rembrandt, and then it attributed the of his disciples, no insurance will not cover the collector will reduce its market price.

so far in the press reported the particularly difficult cases, that would test a new type of insurance "in the battle." However, claims that several of these disputes have been settled, and in one case featured an important American museum.

In general, insurance of property rights can be called a good way to protect yourself from legal squabbles. Especially when it comes to novice collector, who does not have enough time to study in detail the provenance of expensive.

Prepared by Mary Onuchina, AI

Sources : artinvestment.ru

From the Editor : A good attempt to do useful work, especially since the amount of restitution disputes is growing year by year. But once there is a series of questions:

1. Payment of a one-time or annual insurance? If the annual, as well as any other standard insurance, then, first, it is expensive, and secondly, of course. You stop paying - and then by the law of meanness comes an accident. If a one-time payment, this is interesting, but there are doubts about its financial viability. The times are not stable and that the money will be in 10-20 years, the big question, and only with the companies even more.

2. Immediately it is clear that demand such a service may be known for shady deals, because if the provenance is known, then why do anything to insure? And if there is any doubt about the authenticity or provenance, then why buy it? Remaining property disputes, but they are regulated by law and reinforce their insurance is not an obvious need.

Babulin Constantine, AI