Dec 27, 2012
By Michael Kramer
In the wake of superstorm Sandy fine art insurers face claims of up to half a billion dollars to compensate owners of artwork destroyed when the huge storm flooded galleries in New York city.
An industry source says works by 1960s graphic artist and illustrator Peter Max account for the bulk of the loss costing insurers $300 million.
One underwriter says galleries and art warehouses affected by Sandy could be forced to pay up to 25 per cent more for insurance, and insurers could refuse to cover premises in low-lying areas of Manhattan against floods.
The Chelsea district of New York is where many art galleries are located. Art warehouses in New Jersey were also affected.
Previous big art losses include $33 million from a 2004 warehouse fire in east London that destroyed work by British artists Damien Hirst and Tracey Emin.
In 2006, U.S. casino owner Steve Wynn put his elbow through a Picasso he owned, resulting in a claim of about $40 million.
Art insurance payouts are sometimes lower than the initial claim because of adjustments to reflect the market value of the artwork.