Uh oh. A 12-year-old Taiwanese boy came very close to working off a serious debt for the rest of his life. While walking in front of a 350-year-old Paolo Porpora oil painting worth $1.5 million, the poor kid lost his footing and fell into the painting, punching a fist-sized hole through the canvas, according to NPR (which has a video of the million-dollar trip, if you need your daily dose of schadenfreude).
Focus Taiwan News states the exhibition organizers will not ask the boy's family to pay for restoration costs or damages. The report notes the painting is part of a private collection and is insured. You hear that, folks? Insurance saves the day yet again.
The story goes to show that slips and trips – which can happen to anyone – can permanently damage a priceless item. If you are responsible for caring for that item, those damages can come out of your pocket if the artwork isn't insured with Inland Marine Insurance.
Let's take a look at what this policy can do.
Inland Marine Insurance for When Property Damage Leaves You Adrift
First, let's set the scene. You're a restaurant owner carving out a piece of the trendy meets fine-dining market. For atmosphere, you offer to display work from several prominent local artists. It's a win-win situation: you get to have notable artwork adorn your place of business, and they get to put their work in front of patrons who might be interested in buying the art.
But here's where this arrangement can go sour quickly: what happens if the work is damaged? Who is responsible for footing the bill?
Both you and the artists benefit from the displayed artwork, so before those paintings or photographs go up, you need to sort out who will insure the property with Inland Marine Insurance. This coverage can "float" with the insured property as it moves around, unlike Commercial Property Insurance, which can only cover items at a fixed location (e.g., your restaurant's furniture). Inland Marine can provide coverage for valuable and rare items that are lost or damaged while…
- In transit.
- In someone's temporary care.
- In a fixed but movable location (e.g., equipment in a food truck).
Arguably, the artists have a little more to lose if, say, one of your waiters falls into a painting and tears a hole through the canvas. It may make more sense that they carry the Inland Marine coverage to protect their work. That doesn't mean you're entirely off the hook. They could always sue you, claiming you had a responsibility to preserve the work while it was in your care.
To guard against that eventuality, you have a few options:
- You can hope that your General Liability Insurance doesn't exclude coverage for expensive artwork. A standard General Liability policy can pay for damages you cause to someone's property, but it may not apply in this case. In short, artwork falls into a category of its own in the insurance world because it is rare and expensive, which means it is also difficult to restore or replace when damaged. Ask your agent what your policy will and won't cover.
- You can request to be added to the artist's Inland Marine policy as an additional insured. If your business is the reason their work is destroyed, your additional insured status may deter the artist from suing you, your business, and your employees. That's because the policy can pay for the damages that happen under your care. To learn more about being an additional insured, read "Want Additional Insured Status? Start with These 3 Things."
- You can sort out liability in your contract. This isn't a replacement for insurance, but it can help you and the artist settle a dispute over damaged work more efficiently. Your contract should also state who is responsible for insuring the displayed work.
To learn more about how to effectively use contracts, read "Case Study: How Good Contracts Can Protect You From Legal Trouble."