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Insurance On Loaned Items — How common?

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    • #135065
      Sterling Jenson

      When I was working at the Mathers Museum of World Cultures, I was put in charge of the loan paperwork and part of the process was to get insurance for these items that we were borrowing. Therefore, I assumed getting insurance for loaned was standard operating procedure for dealing with loans.

      The new director stated that many transportation focused museums the items on loan are not insured. Do other museums not insure their incoming loans? The director has several years of experience being a director at a different museum.

      Any additional thoughts, comments, questions.

    • #135066
      Marianne Kelsey

      I come from a private practice conservation perspective, and I can say that securing coverage for individual artifacts can be time-consuming, and sometimes cost-prohibitive. However, I really do not know what standard museum practices are for incoming loans. Let me make a few inquiries, and see if I can find some answers for you. This may take a few days.

    • #135067

      Securing insurance for incoming loans is standard practice. Often the borrower has a blanket or umbrella fine arts policy for maximum probable loss and then would add an itemized insurance rider for the loans. I haven’t worked with a transportation museum, but whatever the arrangement, it should be spelled out in the written loan agreement so both the lender and borrower agree to the terms.

    • #135068
      Marianne Kelsey

      I’ve checked with a few other C2C experts, and they are in resounding agreement that the standard practice is for the borrowing institution to insure the item. When a museum requests a loan — whether from another museum or from a private lender — it is their expectation that they will cover the insurance and thus they offer to insure in the initial request for the loan. The work will be in their “care, custody and control” and not the owner’s. Why should the owner’s premium go up if the borrower or the borrowers agent damages or loses the work? The borrower would be liable for any damage or loss and their policy would cover the loss – not the lenders. Hand in hand with that, there should never be a deductible for works on loan to a museum.

      Some lenders prefer to retain their own insurance and have their insurance broker bill the borrowing museum for their coverage. This is not the norm, but it is their option as it is their property. One circumstance where this might come into play is if the museum is borrowing from a lender in another country and the lender, if there is damage, would not want to have the claim adjudicated under another country’s laws.

      A bit of an aside — when the borrowing museum issues a certificate evidencing insurance (CoI) under their policy, the lender will usually ask that they are named as additional insured and loss payee on the certificate. I hope this is helpful.

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