Property Insurances

If an artist exhibits or loans out works of art, the exhibition or loan contract (cf. loan agreement, annotated model contract or standard agreement NEMO) should specify that the contractual partner insures the works for transport "from nail to nail" – also for transportation across borders – and for the entire duration of the exhibition. This is common industry practice.  

Organizers of art exhibitions should always take out all-risk insurance. Any damage should be insured: theft and damage of exhibits by visits or employees of the organizer, as well as damages caused by venue defects. Coverage should extend to transport. Exceptions must be listed and specifically excluded to avoid disputes. Clear contract design (formulations) must be ensured.

(cf. OMC final report: practical ways to reduce the cost of lending and borrowing of cultural objects between Member States of the EU)

While such behavior of the organizer is not reputable, it is also not uncommon. If the artist nevertheless decides to accept the invitation to the exhibition, he/she can purchase an insurance policy that covers the works. An insurance broker should be consulted who may provide the artist with an offer for the specific case. Exhibition insurance is usually associated with extremely high costs. 

Tip: Before shipping one’s own works of art to the exhibition site, one should ask the organizer for a certificate of insurance from an insurance company as proof for sufficient coverage. This certificate provides leverage in case of damages.

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Transport insurance is designed to protect equipment on tours and art works during transport between sites. In fact, most cases of damage occur during transport and loading and unloading. 

An additional insurance for artists or creatives is not necessary in many cases because the different types of insurances sometimes overlap: Exhibition insurances in line with the industry standard „from nail to nail“ include transport. Musical instrument insurance also already includes the risk of transportation. Professional shipping companies are usually commissioned with large-scale transports and such companies also insure items during transportation. 
 

What has to be taken into account in case of independent transports? 

The designer can independently insure the transport by purchasing a transport insurance policy. When purchasing the policy, he must state what kind of objects he would like to transport to allow calculation of the individual insurance premium.  

The designer will have to consider whether the value of the works and the amount insured are proportional in a way that makes the policy worthwhile. This is often not the case, especially when an artist is still at the beginning of his/her career: Selling prices will be used to determine the amount insured, which can thus be correspondingly low. 

The designer should also take into account what requirements the insurance has for packing and stowaging the objects. If the requirements are very demanding, the insurance may not be liable in case of damage. 

Legally, the musician is not at fault. A tacit exclusion of liability can be assumed to apply to the transport she agreed to carry out at no charge. Financial compensation would only be provided if the transport was insured. What happens in the event of damage or loss should be discussed in advance. 

Tips:

• In case of performances by a theater group or band in the evening, it is advisable to make sure that storage of equipment in the car/truck is insured even after 10 p.m. The so-called night-time clause greatly restricts the adjustment of claims between 10 p.m. and 6 a.m. and should not be included in the contract. However, exclusion of this clause usually increases the premium significantly (by about 25%).
• Transport insurance will replace the value of the stolen items in case of theft. 
• Protection for transports to Eastern European countries is generally very costly or – depending on the insurer – not even possible. Some rental car companies exclude travel to certain countries.

The amount can be insured at an additional charge. If this is required frequently, for example, if the artist regularly sends works by mail, he/she can purchase (annual) special protection, i.e. regular insurance with a minimum term of one year. This is cheaper than individual insurance through the shipping company.

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Event cancelation insurance should be considered, especially for events that are dependent on the presence of certain persons, art works or musical intruments. If the soloist of a dance performance becomes sick, for example, and the planned tour cannot take place, the organizer may be faced with substantial costs and financial losses. Even if the events are canceled in time and there are no recourse claims, significant costs may have already been incurred for advertising and preparation.

In this case, the gallery's event cancelation insurance would cover the damages incurred, but only if the delay at customs could neither have been foreseen by the gallery nor by the artist.

The gallery's event cancelation policy covers the financial losses incurred as a result of the temporary closure of the exhibition.

However, the event cancelation insurance does not cover the damaged works of art, as they themselves are not included in the insurance policy. An all risks insurance policy taken out by the organizer or an art insurance policy taken out by the owner of the art works would cover the damage. 

An event cancelation policy protects against financial losses resulting from cancelation, termination, or change of date of an event. In this regard, it is important that the events occurred through no fault of the insured party. Costs insured include local expenditures for rent, catering, possible artists' fees, as well as advertising, and possibly the loss of profits, including sponsorship. There are different types of coverage and possible additions to the insurance coverage. 
Further possible coverage components include, for example, costs incurred as a result of cancelation, termination, or change of date of the event due to the illness, accident, or death of an artist or creative. 
Another possible addition is the “adverse weather clause”, which provides coverage if an event must be canceled due to weather conditions that represent a danger to life and limb of visitors and other participants. 

Note:

• Although event cancelation insurance policies are usually taken out by the organizer, event cancelations can also be insured against by individual artists and creatives. This rarely occurs in practice, however, since the costs are usually too high for an individual.
• The events covered by an event cancelation insurance policy should be documented clearly in order to avoid disputes in the case of any claims. A specialized broker should be consulted as he/she will be liable for the damages if he/she offers incorrect advice.
• The cancelation of events abroad is only covered if these were included at the time the application was submitted. The insurance premium is dependent on the existing risk.
   

Event cancelation due to non-appearance

The event cancelation insurance covers the financial damages incurred in relation to advertising and the loss of entrance fees – but only if the non-appearance of persons listed in the insurance policy was included as an additional risk. 
If, in addition, the artists' fees were also included in advance, these will be reimbursed as well. Depending on the insurance company, a deductible (usually 20% of the insured risk) applies, which must be paid by the artists themselves.

The event cancelation insurance will cover the related costs if the insurance coverage has been supplemented by an “extended non-appearance” provision.

The event cancelation insurance will also cover this case, provided that the insurance coverage has been supplemented by an “extended non-appearance” clause. However, this is only the case if the denial of the visa was unforeseeable (e.g., if the dancer has already obtained a visa for the same country without difficulty in the past).

Tip: Artists, creatives and ensembles would do well to urge the organizer to take out event cancelation insurance – including coverage for the loss of artists' fees.
 

Event cancelation due to bad/extreme weather

Since the weather poses a danger to life and limb of visitors and participants, the event cancelation insurance covers the damages incurred – but only if the contract includes the “adverse weather” clause.

This does not pose a danger to life and limb of visitors and participants. An event cancelation insurance policy would therefore only cover the costs incurred if weather risks such as fog, snow, and rain are included in the policy.

Tip:

• Organizers can circumvent the need to conclude an event cancelation insurance policy including the “adverse weather” clause by offering an alternative date for the performance or concert. However, it should be noted that even a postponement of the date can lead to financial losses. If an alternative date is not feasible, an event cancelation insurance policy including an “adverse weather” clause is recommended. 
• The days or weeks before the event should be included in the period of validity of the event cancelation insurance policy, because even if the weather is good on the day of the event, an event may have to be canceled because the venue cannot be used due to extreme weather beforehand. This eventuality is not covered unless an “adverse weather” clause has been included!

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Did you leave your guitar on the train or drop your violin during a concert?

In order to be well protected in such cases, owners of musical instruments are advised to take out musical instrument insurance. This type of insurance offers what is known as all risks coverage. The key points of such policies are explained in the following.

The benefits of musical instrument insurance policies far exceed those of ordinary household insurance policies. In the case of household insurance, instruments are only insured while inside the home, or, if supplemental off-premises coverage has been taken out, in other closed rooms (e.g., hotel room). Furthermore, since such policies only cover a limited percentage of the value of the item insured, very expensive instruments may not be protected sufficiently.

Musical instrument insurance, on the other hand, also includes transport damage, simple theft and carelessness on the part of the owner - at concerts, on the road and in the rehearsal space. It offers protection for musical instruments of any kind as well as accessories, such as cases, sheet music, or music stands.

Musical instrument insurance provides what is known as all risks coverage. It usually covers the following risks:

• Damage to the instrument
• Loss through theft, robbery, extortion
• Loss and mix-ups resulting in the wrong instrument being taken
• Embezzlement, fraud
• Accident involving the means of transport
• Destruction by fire, lightning, explosion
• Destruction by water, moisture or natural disasters such as storm, hail, flooding

Good coverage should also include the following:

• In addition to the instrument, the policy should cover any accessories, e.g., cases, bags, stands, straps, holders, etc.
• Electronic and electrical accessories (lighting and sound technology and accessories) should be covered, e.g., electronic and electrical transmitters and amplifiers, speakers and microphones, etc.
• The full insured value should be reimbursed in the event of loss and the full repair costs should be covered in the event of damage.
• Worldwide insurance coverage applies.
   

Important: The night-time clause, which applies between 10 p.m. and 6 a.m., must be considered. If instruments are left in a car (as is often the case for larger instruments) during this period, for example, during an overnight stay, they are not insured. However, this night-time clause may be removed in return for a higher premium.
 

How is the insurance premium determined?

The musical instrument insurance premium depends on the value of the instrument.
Usually, an annual premium of 1.5% (plus insurance tax) of the value when new applies. However, this percentage may vary from instrument to instrument and also depends on the area the insurance covers (e.g., Germany, Europe, world).
 

Who should take out a musical instrument insurance policy?

In general, it is advisable to cover any risks that may threaten one's livelihood. If, for example, damage to or loss of the instrument would result in a loss of a musician's income and thus threaten his/her livelihood, the instrument should be insured. If any damage or loss can be weathered financially, the question of whether to take out insurance coverage is a personal decision.

This raises the question: Who owns the instruments? The artists or the partnership? While the partnership under civil law may take out insurance for the instruments for the duration of the tour, even if they are owned by the artists, the instruments would then only be insured while being used on behalf of the partnership. This requires a consultation with the insurance provider as it is not a standard policy. Supplemental transport insurance is only recommended if further items other than the instruments also need to be insured.

Both the geographical scope of the policy (Germany, Europe, world) and the night-time clause must be considered in any case!

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