Evaluating Risk in the Storage
Transporting of Fine Arts

DRAFT April 10, 1995


Inland marine underwriters are often asked to insure fine art shipments for a museum, gallery or private collector. At first, underwriting this type of risk may appear to be overwhelming and complex. The values requested can be extremely high, the items unique and irreplaceable, and the logistics of a move can vary from truck to airplane as well as within the U.S. or international. After all, fine arts are floating risks. Many questions arise when underwriters are confronted with this type of risk

Who will pack the art?
What is the experience of the packer?
Will the packing be adequate and appropriate for the medium?
Who will transport the art?
Are there special requirements for transporting the art?
How does one evaluate the security for high-valued works of art?
Will there be a need for storage?
Is the storage facility acceptable for fine arts?
How can the quality of the storage facility and its reputation be determined?

The purpose of this bulletin is to provide answers to these questions and to determine the best practices for packing, storing and transporting works of art. This bulletin can be viewed as a tool for developing knowledge of this specialized class and to overcome the challenges that fine arts can pose to the underwriter.

The following example illustrates the importance of evaluating the storage and transport of fine art to prevent losses. Poor practices by a warehouse operator led to a very large loss for two insurers participating on the risk.

A fine art moving and storage company transported two large sculptures to its warehouse for long term storage. Arriving after working hours, the driver parked the still-loaded truck in the loading dock for overnight temporary storage, blocking another truck. The following morning the blocked truck was needed for a run. The driver pulled out the loaded truck and parked it temporarily on the street next to the loading dock. The truck -- still loaded with the two sculptures -- was left running with the keys in the cab while the driver walked back to move the other truck. It took only a few seconds for the unattended truck to disappear along with its valuable contents. It was not until three years later that the sculptures were recovered, having passed through numerous hands prior to appearing in a well-known auction house. This recovery was possible only because the theft was reported to the International Foundation for Art Research, which specializes in recovery of stolen artwork.

Lessons Learned:

1) Coordinating arrival of fine arts during operating and work hours is critical.
2) Trucks should never be left unattended.

In order to develop the underwriting and loss control issues for this bulletin, IMUA's Arts & Records Committee visited several firms that specialize in fine art moving and storage. Interviews also were conducted of gallery and museum registrars who use these firms on a regular basis. Underwriters are cautioned that these facilities are subject to changes in quality of services based on economic conditions, including fluctuations in the fine art market. Therefore it is strongly recommended that underwriters continue to verify the quality of the facilities by speaking to local gallery and museum registrars.


Carriers and warehouses in the art market may offer a wide range of services for museums, art galleries or individual collectors. The following are the major services which underwriters should evaluate to assess the loss potential presented by transit and off-site storage.

A. Packing and Handling

Why is specialized packing of art objects critical? Breakage or partial damage to objects can occur if they are packed carelessly or incorrectly. Also, correct wrapping materials must be used to prevent mold, moisture or other damage to the integrity of the objects.

Outer packaging materials consist of crates, screws and latches, all of which are custom built for the particular art object. Inner packaging materials include packing foams that are cut to encase the objects and provide shock absorption. Objects will be wrapped in various materials to protect against breakage and environmental damage.

Are there different levels of packing requirements? The nature of the collection, distance and number of locations where the art will be exhibited will determine the levels of interior and exterior packing requirements. A qualified packer working with the museum or gallery personnel will choose appropriate interior packing materials and exterior boxes, crates or museum quality traveling cases.

How can the wrapping materials damage the artwork? It is important for the packer to be aware of what the artwork is made of before choosing the wrapping materials. Materials not properly "matched" can result in damage. For example, some synthetic foam wraps produce "off gases" which can damage the surface of paintings. Other materials do not allow the art to "breathe" and molding can result.

What are the best wrapping materials to use? There are many types of wraps and linings available based on necessity and expense. Quality papers include glassine, silicone parchment and unbuffed tissue. They all contain fibers that conserve the properties of the artwork. In addition, there are more expensive wraps made by Dupont, such as Tyvek and Nomex, which are resistant to water and rapid changes in humidity and temperature. These materials are more durable and can be reused. Packers who specialize in fine art transit often consult with conservators as well as museum and gallery personnel to select the proper materials for various media.

B. Transporting Fine Arts*

The first concern prior to transporting any art object is to determine if the item is physically capable of withstanding the perils and stress inherent in shipping. Fragile items that show evidence of deterioration, cracking or separation or that are deemed too valuable to ship may require special underwriting consideration.

In case of loss or damage to the art, prior to shipment the owner should have a complete description of the object(s) being shipped. Pictures or reports that verify the object's condition should include details on the object's age, size, color, artist, and any other unique or identifying features. An appraisal of the object's value also should be available. A simplified condition report can be completed by the carrier prior to and after shipment to identify and damage that occurs during transit.

Also, the owner will want to carefully plan and review all shipping documentation to make sure that delivery forms and contracts meet their specifications. All contracts and bills of lading should specify shipping terms, insurance, custody and the responsibilities of all parties and should be properly signed and completed. (See also Transportation Liability Issues, page 10.)

Underwriters should consider the following areas when evaluating a fine art carrier: experience; security; routing requirements; and international shipments.

Is the carrier an experienced specialist with fine arts? What percentage of the carrier's customers are museums, galleries, collectors, etc., and can they be contacted as a reference? How long has the carrier specialized in handling artwork? Preferably the firm will have moved art objects of similar size, type and value. Coordinating the logistics of any fine art move requires sufficient lead time since fine arts moving and storage firms often provide only local shipments. For long-haul transit they must contract with major van lines. What other services are provided? If art objects require special handling, such as specific temperature or humidity controls, the trucks should be properly alarmed to alert the driver of any malfunctions.

*See Appendix A, page 13, for simplified Transit Exposure Checklist

As in all transit risks, underwriters should evaluate management's overall commitment to loss prevention:

  • Who are key personnel and what is their level of experience? What is the firm's financial condition?

  • What is the carrier's accident record? Employees should be properly screened (character references, prior employment checks, MVRs, etc.) and trained. What is their average length of service? Are all drivers and workers employees of the company or are they subcontractors? Are formal loss prevention programs and procedures in place and are employees encouraged to participate? All employees should know who to call and what to do in the event of an emergency (fire, theft, collision, or breakdown).

  • What types of equipment or vehicles are owned? How old is it and are inspections and maintenance checks performed regularly? Are trucks equipped with air-ride suspension for shock absorption?

What type of security procedures are in place? Determine which types of locks and alarms are used and if they are maintained regularly (i.e., checked daily or prior to every move). How many drivers are required per vehicle? Trucks should never be left unattended at any time (some policies have "attended vehicle" warranties that exclude theft coverage unless a person is actually in the vehicle). The carrier should use unmarked trucks and containers for moving fine art; labeling trucks and crates as containing valuable merchandise only attracts thieves. It is possible to track delivery of items by electronic communication devices to identify the location of the truck. Locations can also be reported by the driver via mobile phones. For high-valued shipments, a trail vehicle should be used. Do drivers follow a theft-prevention checklist prior to high-value moves? Both the owner and the carrier should immediately report all stolen art objects to the local authorities, the FBI, the INTERPOL, IFAR and the Art Loss Register to increase the chance of recovery.

Theft prevention also includes proper packaging. Although packing methods for art objects may provide adequate protection against breakage, they may not deter theft or pilferage. Methods that make the containers more difficult or time consuming to open will discourage theft. All seal numbers and colors should be properly recorded. If used correctly, seals may provide a means of determining if the package has been tampered with or opened. Also, packaging that is adequate for domestic shipments may be totally inadequate to withstand the additional theft hazard for shipment overseas. If more than one international shipper is involved, the chance of pilferage may be higher.

Does the carrier strictly enforce destination and routing requirements? Are prescribed delivery routes assigned? Drivers should not be allowed to deviate from assigned routes. Are they allowed lunch or rest stops? Non-stop deliveries should be used whenever practical. Are there procedures to notify the receiver when shipment is expected to arrive so that the correct person receives the art at the correct time during regular business hours? Underwriters may need to consider additional precautions in large metropolitan areas, where cargo hijackings are becoming more common.

Is the carrier experienced in international shipments? Overseas shipments require special planning. Due to the number of times art objects change hands during foreign shipments, care should be taken to simplify the handling process and assign the most direct shipping routes as possible. Although expensive, air shipments will not only assure quick delivery but cut down on the number of times the object must change hands. Valuable objects might require couriers to personally deliver the objects to an assigned individual.

C. Couriers

What is a courier? Couriers travel with the object to protect fragile, irreplaceable items that have high values or are politically or culturally sensitive, or items with intrinsic historical, artistic or scientific worth. The lender, whether a museum or personal collection, will most often decide whether it is necessary for a courier to travel with the item. Oftentimes the courier will be a museum employee.

How should a courier be selected? The courier should be qualified to handle the transportation of the item or collection due to the fact the services (fees, hotels, air/ground transportation, etc.) can be expensive depending on the distance and length of travel. The courier selected should be someone that cares deeply about the objects and understands their exhibition qualities. A courier should be one who handles objects in the course of daily work and is therefore familiar with special handling and installation techniques. For these reasons, a conservator is often a good choice.

What are the courier's responsibilities? The courier will be responsible for the care of item or collection from "nail to nail" or "wall to wall," which includes tracking the unloading, unpacking, installing and reloading of the item or collection, as well as completing all documentation, including condition reports. Therefore, the courier should conduct a trial run on paper prior to the shipment to be familiar with all the detailed steps necessary throughout transit. A contingency plan should be part of this trial run to cope with any unforeseen catastrophes and damages.

The courier must have a full orientation of how each object is packed inside the crate and how to repack the item in case the object must be opened unexpectedly, due to damage in the course of travel, or customs inspections.

A customs broker should be hired prior to international travel to ensure papers are processed readily; otherwise a shipment could be in terminal storage for days waiting for the paperwork to be approved. If possible, the courier should not open the crate while in customs. Instead the courier should be able to present to customs officials a pre-written letter authored by the museum director explaining the exhibition and the objects contained within the crates, as well as photographs of the items. Any damage to the objects should be recorded by completing condition reports and taking photographs of the damaged areas to submit to the insurance claims department.

D. Storage and Warehousing*

What are the basic requirements for a fine arts storage facility?

Fire Protection: Underwriters and art professionals are still debating the merits of sprinkler protection because of traditional concerns about water damage. However, the majority advocate that water damage is preferable to a total fire loss. Sprinkler technology and designs have improved to the point where the risk of accidental leakage has been minimized. Therefore, automatic sprinkler systems offer the best overall protection.

Is the warehouse sprinklered? If so, which areas are protected by sprinklers (i.e., vaults, hallways, and work and crate-making areas)? Has the sprinkler system been specifically designed for the unique occupancy? Determine if the system is routinely inspected and tested. Central station monitoring of the sprinkler system is recommended to help minimize potential sprinkler leakage. Is the central station UL-listed? Also, portable fire extinguishers should be interspersed throughout and should be easily accessible. The warehouse also should have alarms that are activated by heat or smoke. Subdivision of the storage areas by firewalls will help prevent the spread of flames and smoke throughout the facility.

Crate construction is typically done in a woodworking area that has many fire hazards. There should be a dust collection system in the cutting area, and appropriate fire detection and suppression systems must be installed and maintained. If possible, crate construction should be on a separate floor from the art warehousing. For practicality the packing is done near the crate-making area; however, the ideal situation would be for packing and crate-making to be separated.

*see Appendix B, page 14, for simplified Warehouse Exposure Checklist

Security: A good security system is necessary to prevent theft. The system should always be evolving to meet the changing demands of the facility. It is essential that the warehouse have a UL-certificated burglar alarm system, and underwriters should be sure the UL certificate is up-to-date. Older alarm systems should be retrofitted to meet current standards. All door and window openings should be secured and protected by the alarm system. Preferably the alarm system will be monitored by a central station, and back-up power available. It is essential that the central station alarm company itself be UL-listed as well. A popular new development is the use of radio transmitters, which in the event of a robbery allow the owner and police to monitor what is going on inside the facility or individual vault.

Employees should wear identification tags. Also, non-employees and visitors should identify themselves before they are allowed entry and should be required to sign a log book. Some facilities may also have closed-circuit surveillance cameras.

Housekeeping: Poor housekeeping may indicate sloppy management practices as well as present a potential fire hazard. The facility should be checked for conditions that will contribute to decay, mildew and mold -- all of which can be harmful to fine art. The warehouse should have a contract with an outside exterminator to control infestation.

Recordkeeping: The "paper trail" (or today, the "electronic file") that follows art objects is key in preventing or mitigating losses. An art warehouse should maintain and keep up-to-date the following information:

  • Bills of Lading, warehouse receipts or other shipping/storage documents

  • Origination and final destination of art objects

  • Owner of the art, valuation documentation term storage, it may be advisable to conduct periodic inventory checks. What is the main advantage of using a company that specializes in the storage, packing and transporting of fine art? First, these firms hire professionals who have many years handling fine art; they are familiar with the proper techniques for storage, packing and transporting of fine art. Using a warehouse that specializes in fine arts eliminates the increased hazard resulting from using a general commodities warehouse that claims to handle fine art, and from not knowing whether the building was designed for a different occupancy or what other operations may be done in the building. Warehouses that specialize in storage of fine art generally are of superior construction and have state-of-the-art fire and burglar protection with the necessary back-up systems.

What features do specialized fine arts warehouses have?

Typically these storage facilities are multi-story buildings located in larger cities. They usually offer the following services: trained art handlers, climate control, specialized packing, custom-built crating, freight forwarding services, and computerized registration and inventory. The warehouse is generally divided into several sections to aid with security as well as fire protection. Clients store their art objects in private room-sized vaults, usually individually assigned, allowing them to visit the area of the warehouse where their objects are kept without any increase in hazard to the objects of others. Some warehouses allow clients (such as museums) to occupy partial or whole floors of a facility. This permits a working area for clients in which they may set up offices, install computers and put in their own alarm system.

Why is climate control so important in the storage of museum-quality fine art?

Climate control is one basic service that a fine arts storage facility offers. They often take great pride in the sophistication of these systems which will prevent mold, mildew and fungus. The warehouse manager should be able to describe the system in full, and also be able to provide specifics about the maintenance of the system.

Why is it important to know what conditions exist in the storage facility?

Inevitably, art objects are stored for longer periods of time than anticipated. There are delays in preparation of exhibit areas or there are too many pieces to display at one time, which results in storage of items for extended periods. If improperly stored, serious damage or loss of the object could result. It is critical that the storage facility have the proper fire, burglar and sprinkler alarms as well as temperature and humidity controls. A physical inspection of the warehouse is highly recommended.


The highest frequency of loss to fine art is in transit. Determining which party is responsible for such losses can be difficult, since the extent of liability varies with the type of carrier and the documentation issued to the shipper (to simplify the following discussion, the term shipper refers to the owner of the art object). Similarly, the likelihood of loss depends on the carrier used, and the likelihood of recovery depends on the paperwork completed by the shipper of fine arts. The shipper should review all documents prior to shipment to ensure appropriate indemnification at the time of loss. Therefore it is also critical for underwriters to evaluate the insured's documentation procedures so that all paperwork is completed correctly prior to shipment.

The following discussion will help distinguish between the major types of carriers and related liability.

Freight Forwarder: The shipper often uses the services of a freight forwarder, which arranges for the packing, shipping (any mode of transportation, both foreign and domestic) and storage. Ideally the freight forwarder will arrange the shipment at the broadest possible terms and cheapest price for the shipper. One of the advantages to a shipper of using a competent freight forwarder is the consolidation of paperwork and proper documentation. The freight forwarder's liability for the goods is usually determined by the choice of carrier and the carriage arrangement.

Common Carrier (truck): Essentially a common carrier is one who operates a carrier for hire of non-owned goods for the general public. The carrier's liability for loss or damage to the goods is strictly determined by common law through the use of the Bill of Lading issued by the carrier. The liability of a common carrier is determined by statute or tariff (in the absence of a written tariff by agreement of parties). While operating under a released bill of lading, the dollar amount of a common carrier's liability may be reduced; nevertheless, the common carrier's liability is still absolute with some notable exceptions, such as Acts of God (e.g., flood, earthquake). A common carrier is a virtual insurer of goods, unless the shipper agrees to release or limit its liability in consideration of a reduced rate. For fine arts, most shippers do not want to rely on the carrier's insurance to cover high-valued objects, and instead purchase their own insurance.

Air Carrier: In contrast to a trucker's liability, the liability of an air carrier is released unless the shipper declares a higher value and agrees to pay a higher freight rate. For example, an air carrier's liability usually is $9.07 per pound or $50.00 per package.

NOTE: These differences in waybills are very important. It is possible that the misuse of the waybill can increase the carrier's liability unintentionally. If an air waybill is issued, the shipment must involve air transit for the release to hold. A carrier may not substitute truck shipments for air shipments. If an air waybill is used and the goods are moved by truck only, in the event of damage, the per package limitation can be broken due to the change in the conveyance and the applicable legal liability.

Express Package Carrier: Package delivery services have very limited liability; even declared values are usually not accepted at more than $25,000.

The following example will illustrate the various carrier liability scenarios.

The owner of a sculpture needs to ship an item from California to New York where it will be on consignment prior to sale. The owner has the item professionally packed and arranges to have the item shipped. The shipper will be using both truck and air shipments. The crate arrives in New York damaged and crushed. Upon opening the crate it is noted that the head of the statue is no longer attached to the body, and that damage occurred at some point during transit. The owner could recover if:

-- the common carrier issued a full value bill of lading

-- the contract carrier accepted full liability

-- the air carrier accepted full value of declaration

-- the owner arranged for insurance through a freight forwarder


The warehouse's liability can vary while art is stored at the facility. For example, the responsibility of a warehouse when operating simply as a bailee-for-hire is to exercise only "reasonable care" to protect property from loss or damage. The warehouse's liability can be defined by a "standard warehouse receipt," under which the liability could be as low as $.30 per pound per article, or negotiated through a customer-prepared contract.

There may be special circumstances to consider, such as a carrier's "absolute liability" becoming that of a warehouse's "reasonable care liability" when a shipment remains with the carrier because the consignee was not present at destination to accept shipment during ordinary business hours.

*In addition to this brief discussion, underwriters should review the following IMUA papers in relation to the art warehousing and storage risk: An Introduction to Bailee Liability Concepts (1994) and Warehousemen's Legal Liability (1987).)

APPENDIX A: Transit Exposure Checklist

Does the carrier specialize in fine arts?

Length of time in the fine art business

Are employees trained in the handling of fine art?

What type of crating and packaging materials are used? (i.e., museum-quality?)

Are condition reports completed prior to and after shipment?

Are there two drivers to each truck?

Are the trucks alarmed?

Are the trucks climate-controlled?

Are the trucks equipped with air-ride suspension?

Are trail vehicles used for high-valued art shipments?

How are routing and destination procedures enforced?

Does the carrier use marked or unmarked trucks and containers?

APPENDIX B: Warehouse Exposure Checklist

Does the warehouse specialize in fine arts?

Length of time in the fine art business

Fire protection

What types of alarms (water flow, heat detectors, and smoke detectors) are installed?

Is the entire warehouse sprinklered?

If not, what areas are protected (vaults, hallways, crate-making areas)

What type of alarm monitors the sprinkler system? (i.e., local, UL-listed central station)

Is the sprinkler system tested on a regular basis?

Who performs the tests and are records kept?

Burglar protection

What types of alarms are installed?

If there are windows in the warehouse, are they protected?

Controlled entry for visitors?

Employee identification?

Who has access to the storage rooms and work rooms?

Motion sensors?


Is there backup power for the system or radio transmitters?

Climate Control

Are there temperature and humidity control systems?

What areas are protected by these systems?

Is there backup power for these systems?


Is the inventory control system computerized or manual?

Are duplicate records kept off premises?


Pest control service?

Copy of contract?

Clean facility?

Is the facility designed for this type of occupancy?

Any additional special features that make the facility more or less desirable from an underwriting standpoint?

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