The Burden of Proving Damages to Artwork

Indeed, proving damages in property claims for fine artwork presents issues just as unique as the works themselves. While fine artwork is often insured, the coverages and terms are different than general liability policies. Valuing the loss differs as well. In a typical property damage claim, an insurer uses widely accepted software to estimate the cost of repair or replacement for damaged structures and contents. These estimator programs consistently calculate costs based on such factors as the date the damage occurred, the location of the loss to apply proper pricing, the like kind and quality of materials generally in use for such repairs, and labor costs. But these data  programs often do not apply to estimating damaged artwork.

With artwork, there is no replacement cost for a one-of-a-kind piece. Instead, valuating damage to fine art is often calculated from auction history, provenance (the work’s chronological history of ownership and custody from its creation by the artist to the present day essential for verifying authenticity, determining legal title, and establishing market value), and even the potential for acceptable professional restoration. Unlike a typical property damage claim, the very definition of “damage to artwork” is often hard to discern.

In some instances, identifying damage to artwork is straightforward. An Andy Warhol print depicting Queen Beatrix of the Netherlands included in a Dutch museum exhibit was mistakenly thrown away. A Jeff Koons Balloon Dog sculpture was accidentally shattered when a Miami art fair visitor bumped into the pedestal on which the piece rested. In Chicago, a pickup truck slammed into an art gallery, destroying a large-scale sculpture for sale.

In these examples, the damage evidence is clear. However, gathering the requisite evidence to prove damage to artwork in other contexts can be elusive. Consider when artist James Turrell declared one of his ‘Skyspace’ series owned by the Nasher Sculpture Center in Dallas to be officially destroyed after a neighboring high-rise building “visually contaminated” the work’s intended unobstructed view of the sky. Another example involves the Lascaux Cave in France which was closed to the public in 1963 to protect its 17,000-year-old Paleolithic paintings from damage caused by visitors’ breath. Neither of these claims have damages calculable by traditional estimation methods.

The issue of damage to artwork may also arise in the course of weather-related losses where artwork is destroyed by force majeure. For example, the Visual Artists Rights Act (VARA), provides enforceable “moral rights” to artists and artworks under limited circumstances. VARA enables qualifying artists to prevent the intentional distortion, mutilation or other modification of a work that is harmful to their honor or reputation. Where the work is of “recognized stature”, VARA includes the right to prevent any intentional or grossly negligent destruction of the work. VARA provides for monetary damages, but what constitutes “damage” is not well established in the interpreting case law.

Artwork—investment pieces or otherwise— embodies both personal and aesthetic features that prove difficult to value in the event of property loss. Investment in fine art is increasingly prevalent, and with it, the issue of damage to artwork is developing too.