EVALUATING the RISK in the STORAGE and SHIPPING of FINE ART: Insights Into the Art Service Industry

EVALUATING THE RISK IN THE STORAGE AND SHIPPING OF FINE ART: Insights into the Art Service Industry

Table of Contents

1 INTRODUCTION ...... 0

2 SELECTING A FINE ART SERVICES COMPANY ...... 1

3 SHIPPING ...... 3

4 PROJECT MANAGEMENT ...... 3

5 CONDITION REPORTING ...... 3

6 CRATING and PACKING ...... 4

7 TRANSPORTATION ...... 6

8 FIELD SERVICES ...... 8

9 COURIERS ...... 9

10 SHIPPING LIABILITY ISSUES ...... 10

11 TYPES OF SHIPPERS ...... 10

12 STORAGE ...... 12

13 CONCLUSION ...... 18

APPENDIX A - Fine Art Facility Report Checklist APPENDIX B - ICEFAT Guidelines for Commercial Fine Art Storage APPENDIX C – Materials Glossary APPENDIX D – Warehouse Liability Wording Example

EXCLUSIONS INTERNATIONAL TRANSPORTATION is not covered. Given the vastness and complexities of international air/sea travel this topic deserves a separate paper. International transportation encompasses airline schedules, plane size, tarmac supervision, cargo cross-dock security, customs, fish and wildlife restrictions, tax issues, etc. 1 INTRODUCTION

Inland Marine Underwriters Association members are often asked to insure fine art shipments for museums, galleries, artists and private collectors. At first, underwriting this type of risk may appear to be overwhelming and complex. The insured 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: • What is the object's destination? • Who will pack and handle 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 short or long-term storage? • Is the storage facility acceptable for fine arts? • How can the quality of the storage facility and its reputation be determined? • Who will track/document the art?

The purpose of this paper is to provide answers to these questions and to outline the best practices for packing, storing and transporting works of art. This paper should be viewed as a tool for developing knowledge and protocols of the shipping, handling and storage of artworks. It should serve as a means for differentiating between general commodities warehouses, and those warehouses that specialize in fine arts. Worldwide, there are qualified companies within the art services industry.

The following example illustrates the importance of evaluating the storage and transport of fine art to prevent loss. Poor practices by a fine art moving and storage company led to what was an embarrassing incident for the company but also could have been one of the largest theft losses is the US at the time.

Several years ago, a Goya was being shipped for exhibition at the Guggenheim. The drivers of the truck were scheduled to arrive early in the morning. As they approached NY the evening before, they realized they were going to arrive hours before the scheduled arrival time. Rather than wait outside the museum, they made the decision to park the truck and stay at a motel room overnight. Enterprising thieves spotting an opportunity, stole the truck that night while unattended. Fortunately, the Goya was later recovered without damage.

Lessons Learned: 1) Coordinating arrival of fine arts during operating and work hours is critical. 2) Trucks should never be left unattended. 3) Employee training and monitoring plays an essential role in safe transport.

2 SELECTING A FINE ART SERVICES COMPANY It is important to select a competent and trustworthy fine art services company, given the values being insured and the risk of damage and loss. There are two main bodies of art services: STORAGE and SHIPPING.

In order to develop the underwriting and loss control issues for this paper, IMUA`s Arts & Records Committee visited several firms that specialize in fine art moving and storage. Interviews were also conducted with 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. Therefore, it is strongly recommended that underwriters continue to verify the quality of the facilities by conducting a physical survey of the premises, and by speaking to local gallery and museum registrars.

There is both a certification program and approved best practice guidelines for the commercial fine art storage industry that aids the consumer in narrowing selections. This certification is voluntary, and compliance is not enforced.

1 The fine art warehouse certification program is named GRASP, a survey-based comprehensive examination. The survey is a complete, top-to-bottom examination of the facility using standards developed in conjunction with insurance underwriters specifically for this purpose.

GREvL (Global Risk Evaluation): http://www.grevl.com/services/warehouses.php

Unlike storage, shipping has yet to establish a certification process for best practices due to its diversity of moving parts. The best sources for evaluating shipping are the national museum registrars’ organizations or a local museum. They both have experience with art service companies in their region. • ARCS (Association of Registrars and Collection Specialists): https://www.arcsinfo.org • RCAAM (American Alliance of Museums Registrar’s Committee): http://www.rcaam.org

Finally, there are two global organizations with vetted members in commercial art services; ICEFAT and ARTIM. These two non-profit organizations function as an internal network as they transfer art and its liability between one another, worldwide. • ICEFAT (International Convention of Exhibition and Fine Art Transporters): http://icefat.org • ARTIM: http://www.artim.org

As in all transit risks, underwriters should evaluate management's overall commitment to loss prevention. The remaining sections of this document are overviews of the expected processes, practices and materials used in packing, shipping and storing works of art.

2 3 SHIPPING Shipping services include project management, crating, transportation, and field services. Given the varying dimensions, materials, and overall integrity of art objects; art handlers, packers, and shippers must pay very close attention to every aspect of every piece they handle.1

4 PROJECT MANAGEMENT The successful management of a shipment starts with an experienced project manager. A project manager is tasked with overseeing and coordinating all the details on a shipment. Due to the number of times objects change hands, both local and overseas shipments require a high degree of planning and documentation,

The project manager will also handle the consolidation of paperwork and proper documentation, customs regulations, direct flight and airline schedules, TSA screening, consolidation of charges, and will coordinate the transfer of the shipment to other qualified fine art carriers.

ICOM and the International Committee on Museum Security has published an outline that illustrates some of the complexities of coordinating a simple single object move. See Appendix

5 CONDITION REPORTING The first concern prior to transporting any object is to determine its current inherent properties. A condition report will clarify whether the item is physically capable of withstanding the perils and stress of shipping. Condition reports should be conducted

1 NOTE: International transportation is not covered in detail here. Given the vastness and complexity of international air/sea travel this topic deserves a separate paper. International transportation encompasses airline schedules, plane size, tarmac supervision, cargo cross-dock security, customs, fish and wildlife restrictions, tax issues, etc.

3 by a qualified conservator, registrar, or art handler. Items which are not stable enough to travel or show evidence of deterioration, cracking, or separation may require treatment by a conservator prior to shipment. Special underwriting consideration should be given to these objects.

The condition report will include photographs, object identification details including artist/maker, title, dimensions, media, inventory and accession numbers, and any other unique or identifying features. Any preexisting damage should be detailed in the condition report and the report should be updated at each destination of the objects journey. This is an ongoing process.

When performed periodically and compared, condition reports function as the health record for the object. They document deterioration over time and inform the owner, art handler, registrar and conservator of the best handling, packing, environment, and conservation timing and practices for the work of art.

While many condition reports are still done manually, there are digital condition report applications that simplify this documentation process: • Artreports: https://portal.artservicegroup.com • Articheck: www.articheck.com

6 CRATING and PACKING Damage to art objects will occur if they are packed carelessly or incorrectly. It is imperative that the correct wrapping materials are used to prevent mold, moisture, tarnish, abrasion or other damage to the integrity of the objects. The materials and level of packing will be determined by type and medium of the art.

Outer-packaging materials consist of crates which are sometimes custom built for the particular art object. Inner packaging materials include packing foams that are cut to encase the objects and provide shock absorption.

Crates and proper packing are the first line of defense against damage in both storage and transportation. Each object should be individually assessed based on its

4 distinguishing characteristics, the distance it will travel, the mode of transportation, where it is coming from, and where it is going to determine the appropriate level of packing.

Levels of Packing - Examples are: 1. Soft packing material for moves within the storage facility - i.e. bubble wrap only 2. Shadow box wrapping made of a cardboard frame and packing material. This provides some protection from environmental conditions and damage but has limited strength and durability. This type of packing is only recommended for moves within the facility or local transit. 3. Prefabricated hard case with foam packing: hard cases will prevent some damage from impact or jarring. 4. Custom hard case: these cases are built specifically for the object and are more expensive. They can be reused for the same object but should not be retrofitted for other works of art as they are built to suit their contents. 5. Museum quality case: while this is not a defined term and the features vary, a museum case typically has the following - reusable hardware and fitting, painted exteriors (helps with water proofing), climate envelope, some level of fire proofing, custom built interiors with foam padding and mounting brackets.

Correct Wrapping Materials - It is important for the packer to be aware of the medium of the artwork before choosing wrapping materials. An inexperienced packer may overlook the vulnerabilities of the artwork and the properties of the packing material. Materials not properly "matched" can result in damage. For example, some synthetic foam wraps produce "off gases" which can damage the surface of paintings.

Proper packaging also plays a role in theft prevention. 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. If being used, all seal numbers and colors should be properly recorded. This will provide a means of determining if the package has been tampered with or opened. The level of theft deterrence in the packing should be determined by to hazards of the shipment. 5

It is useful to understand the functions and limitations of the materials used. See Appendix C for a comprehensive review of packing materials and crates.

7 TRANSPORTATION The logistics of the fine art trucking industry commonly utilizes the “hub and spoke” model in conjunction with combined shipments. “Hub” service describes local pickup and delivery to or from a local warehouse. This warehouse would typically be used for temporary storage and cross-docking until the next leg of the shipment. Long- distance shuttle trucking is the “spoke”. In the United States there are shuttle companies specialize in transporting art across the country. They operate scheduled routes to major and secondary cities. Once the shuttle has delivered the shipment to the hub, the items are picked up by a local/regional truck and delivered to the ultimate destination. An alternative to hub and spoke transit is an exclusive-use truck that travels directly to the ultimate destination. Exclusive use trucking is considerably more expensive and usually restricted to ultra-high value shipments.

The minimum specifications for fine art truck are generally considered to be alarmed, air ride trucks with climate control with at least two art handlers.

Underwriters should consider the following when evaluating a fine art transportation company: experience; security; routing requirements; long- haul shipments, high valued single objects, and high valued exhibitions.

Experience - The fine art packer and shipper should be experienced and have a documented history of working with similar businesses that will provide references. It is critical to have knowledgeable staff members who have worked with objects of similar size, type, and value. Drivers should be trained art handlers, when possible. There are certain specialty services which not all fine art shippers provide, such as rigging and long-haul shipping. If a specialty service is being subcontracted, the experience of the subcontractor should be considered as well.

6 The following should be considered when evaluating the shipper’s experience: o Who are key personnel and what is their level of experience? o Is the company financially stable? o What is the shipper's accident record? o Employees should be properly screened (character references, prior employment checks, MVRs, etc.) and trained, both initially and with refresher courses. o What is their average length of service for employees? o Are all drivers and workers employees of the company or are they subcontractors? o Are formal loss prevention programs and procedures in place and are employees encouraged to participate? o All employees should know who to call and what to do in the event of an emergency (fire, theft, collision, or breakdown). o What type of equipment or vehicle is owned? o How old is it and are inspections and maintenance checks performed regularly? o Are trucks equipped with air-ride suspension for shock absorption and climate control? o Does the shipper have contingency plans that include subscriptions to weather services, roadside assistance and access to temporary storage in the event of a disabled vehicle?

Security – Most fine art shipments do not require extra security beyond what is provided by the handlers and drivers; however, for some high value shipments additional security is advisable. Experienced fine art shippers should have access to outside security firms that can provide this service.

It is possible to track delivery of items by GPS tracking devices to identify the location of the truck. Locations can also be reported by the driver via mobile phones. In some situations, this kind of real time tracking may be necessary but is not usually required.

Routing requirements – In most cases the routing of fine art shipments will be determined by the shipper without input form the insurance carrier. If there is concern 7 about the route due to special circumstances, it is possible to negotiate a specific route. If the shipment is going long distance by truck, it is important to understand the scheduled stops along the route and how many drivers will be accompanying the art. Often, insurance carriers will add an exclusion for theft from unattended vehicles if the art is going long distance by truck.

Long-haul shipments – Within the fine art packing/shipping community there is a subset of companies which specialize in long-haul shipments. Some even specialize in a specific route such as New York to Miami. If there is a long-haul shipment, care should be given to who is being hired. The experience model referenced above applies here as well. Additionally, greater care should be given to protect to art from to the shifts in climate conditions. If art objects are particularly sensitive to climate, the trucks should be properly alarmed to alert the driver and /or the shippers’ home office of any malfunctions or interference.

High-valued single objects- In some case with extremely valuable objects a follow car with a two-way communications system should be hired. Drivers know and follow the agreed-upon route and follow a theft-prevention checklist.

High valued exhibitions- The Underwriter will need to determine the maximum concentration of value per crate, per vehicle, per container, per plane, etc. For example: An auction house hired a fine art shipping company to transport a collection from coast to coast. The collection was valued at approximately $400 million. It was necessary to organize the collection to be evenly split into 4 trucks so that no truck had more than approximately $100 million in valued contents. In this example the underwriter also insisted on the shipment being accompanied by unmarked security follow cars.

8 FIELD SERVICES On-site projects require field services - teams of art handlers. They are trained in proper museum techniques for packing, transportation and collection care.

8 A recommended guide for collection care including packing is “Collection Care: An Illustrated Handbook for the Care and Handling of Cultural Objects” by Brent Powell

• https://www.amazon.com/Collection-Care-Illustrated-Handbook- Handling/dp/1442238828/ref=sr_1_1?s=books&ie=UTF8&qid=1486324126&sr =1-1&keywords=brent+powell

9 COURIERS A courier may be hired in some situations due to value, fragility, or susceptibility to theft. A courier travels with the object at all times and is the expert on how the piece will be handled. The courier is the object's “eyes and ears” during the travel, unpacking, installation, de-installation, packing and return shipment. The courier is present for all interactions with security personnel, customs agents, forklift operators, truck drivers, and art handlers for installation and de-installation etc. It is not uncommon for the courier, along with the destination registrar, to perform a condition report on the object.

The courier will have a full understanding of how each item is packed inside the crate and how to repack the item should it be opened unexpectedly during travel, due to unforeseen circumstances or planned events like customs inspections. The owner, whether a museum or private collector, will most often decide if it is necessary for a courier to travel with the item.

A language guide for international couriers is “Courierspeak: A Phrase Book for Couriers of Museum Objects” by Cordelia Rose.

• https://www.amazon.com/Courierspeak-Phrase-Couriers-Museum- Objects/dp/1560981954/ref=sr_1_fkmr0_4?s=books&ie=UTF8&qid=148390481 6&sr=1-4-fkmr0&keywords=cordelia+rose+courrierspeak

9 10 SHIPPING LIABILITY ISSUES The highest frequency of loss and damage 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 terms of service issued to the owner or responsible party. All documents should be reviewed by property owners prior to shipment to determine which parties are liable and what extent should there be a loss. In high volume cases such as large museums and art galleries it may not be possible to review all agreements prior to shipment. In these cases, it is critical for underwriters to evaluate the insured's documentation procedures to confirm all paperwork will be completed correctly prior to shipment under normal operating procedures. In cases of theft, even after liability has been determined and the insurance claims have been closed it may take decades to recover the works. All art objects should be reported to the local authorities, the FBI, INTERPOL, IFAR and other stolen art data registries to increase the chance of recovery. Detailed and complete descriptions will greatly improve the chance of recovering objects lost or stolen in transit. See Appendix D for example wording from a shipper services agreement.

Resources: • Art Recovery International: https://www.artrecovery.com/ • Art Loss Register: http://www.artloss.com/en • International Foundation for Art Research (IFAR): www.ifar.org • FBI National Stolen Art File: https://www.fbi.gov/investigate/violent-crime/art- theft/national-stolen-art-file

11 TYPES OF SHIPPERS The following descriptions help to distinguish between the major types of shippers and related liability.

o Freight Forwarder: The insured may use the services of a freight forwarder, which arranges for the packing, the mode of transportation and storage. Ideally the freight forwarder will arrange the shipment at

10 the broadest possible terms and cheapest price for-the insured. The main advantage of using a competent freight forwarder specializing in fine arts 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. It is possible for the freight forward to retain liability or transfer it (in part or entirely) to the carrier.

o Common Carrier (truck): The carrier's liability for loss or damage to the goods is determined by the Bill of Lading issued by the carrier upon receipt of goods. A carrier may amend limit their liability provided they give the insured an opportunity to declare a higher value and pay an increased charge. The industry standard for limited liability is $0.60 per pound. Typically, the insured agrees to release or limit its liability under the bill of lading in consideration of a reduced freight rate and arranges to purchase other insurance. The Carmack Amendment (1935) provides the legal framework under which the rights, duties and liabilities of shippers and carriers are defined when it comes to cargo loss or damage. Fine art shipments in the United Sates are subject to the terms of the Carmack Amendment. It is important to note that there are circumstances when a common carrier has no liability for damage, such as Acts of God (e.g., flood, earthquake).

o Air Carrier: Much like a common carrier's liability, the liability of an air carrier is limited by the bill of lading unless the insured declares a higher value and agrees to pay a higher freight rate. The typical liability for an air carrier is $9.07 per pound or $50.00 per package.

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

11 12 STORAGE There are two types of warehouse agreements, custodial and non-custodial. Due to the values Fine art storage is usually noncustodial. Fine art warehouses typically offer open storage (co-mingled), and private room storage depending on the client’s needs.

Clearly defined best practices for commercial fine art storage have been created. In 2008 ICEFAT commissioned a document to set standards for commercial fine art storage. We have attached this in-depth document, ICEFAT Guidelines for Commercial Fine Art Storage, to provide a much closer look into the rigorous standards that competent art storage companies strive to achieve. The following section will be organized into the same nine categories as the ICEFAT Guideline and will highlight a few points from each important category. (See Appendix B - ICEFAT Guidelines for Commercial Fine Art Storage)

12.1 Facility

Warehouses that specialize in storage of fine art generally are of superior construction, i.e. non-combustible construction or better. It is preferable that the company be the only tenant in the building. If the building is a shared facility, the other tenant should not be engaged in any business that could increase the risk of theft, fire, pilferage or infestation.

Loading docks should also be taken into consideration. Enclosed docks are ideal for maintaining climate conditions during loading and unloading of the objects and providing a higher level of security during this process. Covered loading docks are also sufficient in most circumstances; however, if the objects are extremely fragile or valuable you may need to consider the individual case. When possible, facilities should have one loading dock per 40,000 square feet of storage to minimize strain.

12 12.2 Security

Security is always evolving to meet the changing demands of the facility. It is preferred that art warehouse have an up-to-date UL-certified burglar alarm system with closed-circuit surveillance cameras. UL Certifications guarantee the highest level of system design and maintenance. All door and window openings should be secured and protected by the alarm system. It will also be monitored by a central station with back-up power and reporting. It is critical that the central station alarm company is UL-listed. • https://library.ul.com/wp- content/uploads/sites/40/2015/02/tca_issue_2_2013.pdf • http://csaaintl.org/wp-content/uploads/2016/08/CS-V-01-2016-FINAL-PDF.pdf

While some facilities still use a lock and key system current technology does allow for RFID card, key pad and biometric access systems. The computerized systems are advantageous because there is an automatic log of each entry and exit, clearance can be customized to the individual, and access can be disabled by management at any time. Facilities using a lock and key system must have procedures to track keys, prevent duplication, and collect them from departing employees.

Any individual present at a fine art storage facility should be readily identifiable to management. All employees should wear identification tags. Non-employees and visitors should sign a log book and wear a visitor tag. Most storage facilities prohibit individuals from carrying bags or cases inside the storage area. If they are permitted, an inspection of bags should be conducted when visitors depart.

Additional resources for art security are offered through the National Conference on Cultural Property Protection: https://natconf.si.edu

13 12.3 Fire

Underwriters and art professionals have traditionally debated the merits of sprinkler protection because of concerns about water damage, specifically the merits of wet line sprinklers vs. dry line sprinklers. As an alternative to a sprinkler system, there are oxygen reduction systems that will not expose the stored items to water should it be activated.

Items to consider for locations with sprinklers: • Does the warehouse comply with local fire code? • Does the warehouse have sprinklers? 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? • Is the system routinely inspected and tested? • Is the system monitored by central station to help minimize potential damage from sprinkler leakage?

There are other practices that will greatly reduce the potential of a fire spreading, should one occur. The warehouse should have UL-approved early warning smoke detection which activates alarms when heat or smoke is detected. Portable fire extinguishers should be interspersed throughout the facility. All areas of the storage facility should be separated by fire-rated walls and doors to prevent the spread of flames and smoke throughout the facility. In addition, there should be ongoing training for all employees if a fire does occur.

There is an increased fire hazard inherent to fine art storage facilities due to on-site crate making facilities. Fire protection and suppression systems in this area should be designed to meet that increased hazard. While it is not always possible, it is preferred that the crate making facility is located within a separate building nearby. In situations where the crate making is not done in a separate building, it should be isolated by fire-rated walls and doors.

14 12.4 Climate

Central station monitoring should also include premises temperature and water sensors. In the event of a significant drop in temperature, a freeze alarm would be activated, and steps could be taken to reduce the potential of sprinkler and plumbing system freeze, thus reducing the possibility of water damage to the art work.

Abrupt changes of climate can cause irreversible damage to an art object. Monitored climate control is a basic requirement for all fine art storage facilities. There are generally accepted environmental standards for the storage of fine art. These standards are specific to different medium and types of objects – i.e. textiles, paintings, film. The generally accepted standard for most objects is a constant 70 degrees Fahrenheit and 50% relative humidity (+/- 15%). While the goal is to maintain these standards at all times, a loss of power or other disruption could cause the temperature to fluctuate beyond acceptable ranges. Superior storage facilities will be able to implement smooth transitions between changes in temperature and humidity and eliminate extreme fluctuations. A controlled, stable environment will also prevent mold, mildew, and fungus.

12.5 Water

The possibility of water damage comes from 2 basic sources: • Mechanical / Structural – HVAC, sprinklers, burst pipes, and other machinery or a collapsed structure. • Natural – rain and surface water

The potential of a water damage loss is increased by substandard maintenance of building systems. The greatest concern for damage during a water intrusion is for objects stored directly on the floor. Items stored on racks or skids generally have adequate floor clearance to reduce the potential for this type of damage. The general requirement is that items be stored on racks elevated at least 6 inches off the floor. As stated above, surface water, sewer backup, and flood/storm surge can also cause

15 water damage. If the warehouse is in a flood zone all storage should be above the ground floor. Items should never be stored in basements or below grade.

12.6 Pest Management

Like temperature and humidity, the environment should be monitored for insects and other pests. The warehouse should have a contract with an outside exterminator who regularly inspects and prevents infestation. Due to the higher likelihood of harboring invasive pests, there should be no co-mingling of textiles with fine art. Textiles and all their packing materials that enter the warehouse should be inspected, wrapped and sealed. Food, drink and plants can greatly contribute to the likelihood of an infestation and should be prohibited in any of the storage areas.

The types of materials used in fine art are virtually limitless. Facilities should carefully review the media used in artwork accepted and identify any which could harbor insects and vermin or increase the likelihood of an infestation.

12.7 Inventory

The paper trail or electronic file that follows art objects is key in preventing or mitigating loss. Fine art warehouses should keep an inventory report with the following information: • Inventory ID Numbers • Warehouse receipts • Waybills • Service reports • Object valuation documentation, account number • Condition reports (origin and destination) and photographs • Bills of Lading, and proof of delivery documentation

Inventory spot checks should be performed on an ongoing basis to identify missing objects as soon as possible. 16

12.8 Human Resources All employees of fine art warehouses should be screened and vetted according to a set company protocol including: character references, prior employment checks, credit checks, criminal checks and motor vehicle records. The company trains employees in the handling of fine art. All employees engaged in handling artwork, should be trained in the proper techniques for storage, packing and transporting fine art. Most fine art facilities employ art handlers who are also practicing artists. The benefit to this practice is that the handlers are inherently more conscientious of the artwork and less likely to cause damage.

12.9 Emergency Planning It is critical for fine art warehouses to have a comprehensive emergency plan, including but not limited to: theft, fire, natural disasters, and terrorist attacks. The severity and likelihood of these threats will vary depending on the geographic region of the facility. Emergency planning must include provisions for business continuation in the event of a major catastrophe. These provisions should be documented and periodically reviewed with the staff.

12.10 Housekeeping Good housekeeping is an indication of effective management practices and will mitigate the potential of loss to the art. Good housekeeping practices include all the aforementioned behaviors and procedures.

Finally, it is critical that the storage facility have the proper fire, burglar and sprinkler alarms as well as temperature and humidity controls. Art storage facilities should be able to supply a facility report upon request which contains details on the level and extent of these systems. See appendix A for a detailed facility report checklist. (See Appendix A - Fine Art Facility Report Checklist)

17 13 Conclusion

The fine art services industry is constantly evolving. It is not possible to cover all contingencies in one document or even in an entire underwriting career. There will always be the possibility a new or unique situation. Underwriters should use this paper as place start to their assessment and guide decision making process. Deviations from the best practices described in this paper will occur. Often it will be with good intent. It is best to know about them before a problem arises and direct changes if the deviation present unacceptable risk.

*In addition to this 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).

18 14 Appendix A

CHECKLISTS Here is a quick reference to some of the questions an underwriter may want to ask relative to the topics addressed in this paper:

o Transit and Storage Exposure Checklist • Name of packer and shipper (please specify if different): • Packer / Shipper Questionnaire • Physical Address of Facility • Number of years in business • Number of years handling fine art • Is there an ongoing training program for fine art handling and procedures? • Are condition reports completed prior to and after shipment? • Number of drivers per truck for pickup and delivery? • Are the trucks alarmed? • Are trucks equipped with GPS tracking devices? • Are drivers required to carry mobile phones? • Are drivers trained to handle art? • Are the trucks climate-controlled? • Are the trucks equipped with air-ride suspension? • Are trailing vehicles used for high-valued art shipments? • How are routing and destination procedures enforced?

Please provide a brief description of the packing material which will be used for this transit:

o Warehouse Exposure Checklist • Name of Storage Company: • Does the warehouse specialize in fine arts? • Physical Address of Facility • Number of years in business

19 • Number of years handling fine art • Is the facility designed for this type of occupancy? • Does the company own the facility? • Is there any below grade storage? • Year built • Construction type • Is this location shared with any other business? • If yes, please provide names and descriptions of operations.

o Fire protection • What types of alarms are installed? • water flow • heat detectors • smoke detectors • low-temperature water • Other

• Is the entire warehouse sprinklered? • Wet • Dry • Is the sprinkler system tested on a regular basis?

If entire warehouse is not sprinkled, please describe the extent of sprinkler systems and which areas are not protected.

• Are the fire alarms systems: • UL-listed central station? • Central Station Monitor?

o Burglar protection • What type of alarms and security systems are installed? • Door and window contacts • Motion detectors • CCTV 20 Are employees screened for credit and criminal histories and are they drug- tested? If there are windows in the warehouse, are they protected? • Briefly describe the procedures for visitors to the facility. • Are hand/parcel bags inspected prior to employees/visitors exiting building? • Who has access to the storage rooms and work rooms? • Is there backup power for the system? • Are there backup transmission systems for the alarms?

CLIMATE CONTROL Are there temperature and humidity control systems? What areas are protected by these systems? Is there backup power for these systems? What maintenance is performed on the systems? Are the systems monitored?

INVENTORY o Please describe the inventory control system. o Are duplicate or backup records kept off premises?

HOUSEKEEPING o Please provide the contact information for the following vendors: o Pest control service o Cleaning Services o Alarm Monitoring o Security Staffing o Please describe any additional special features, operations or conditions which are present at this the facility.

21 15 Appendix B

COLLECTION SECURITY TRANSIT GUIDE FOR MUSEUMS AND OTHER CULTURAL INSTITUTIONS From Museum Security and Protection, a handbook for cultural heritage institution, published by ICOM and the International Committee on Museum Security

Planning of the shipment 1. Loan agreements and documentation signed and exchanged 2. Assignment of primary persons responsible for arrangements at each end 3. Insurance and “foreseeable” liabilities determined separately, with an insurance loss agreement for buying back 4. Evaluation and acceptance of conservation and protection at the lending institution, including an agreement on emergency measures and reporting 5. Protection of shipping information 6. General timetable for shipment

Preliminary evaluation and selection of mode of shipment and route 1. Determination of the size, weight, and specific difficulties for shipment and possible division into separate shipments 2. Determination of packing and crating requirements in relation to various modes of transit 3. Evaluation of possible air, ship, train and road modes or combinations 4. Evaluation of regulations, inspections, and customs requirements for each mode 5. Selection of the most reliable and fastest mode or combination of modes of transit 6. Minimum amount of changes of mode of transit and delay, including control of loading, unloading, changes of mode, rest stops, overnights, layovers, and storage 7. Evaluation of time constraints and weather elements

22 8. Selection of route and alternate route, including avoidance of bad weather, major city terminals, busy or rush hour highways, and holiday travel

Determination of conservation protection requirements 1. Packing and crating protections afforded 2. Additional controls required for temperature, humidity, vibration, water, freezing, infestations and other 3. Condition report checks at both ends 4. Prohibition of extreme limitation of box opening for regulatory and officials while in transit for customs, taxes, agricultural, and antiquities checks 5. Emergency conservation instructions and destinations in case of delay or emergency, coordinated with physical protection emergency instruction procedures and notifications

Determination of physical protection requirements 1. Estimation of normal shipping threat to the art and the possible targeted threat to the art 2. Packing and crating estimation and their protection controls, including the division into separate shipments by value, crate counts, and inventories 3. Evaluation and selection of protection means available in selecting each mode of transit 4. Evaluation and selection of protection means available in management at each terminal stop, overlay, loading, unloading, delay, or change of mode of transit 5. Emergency instructions and destinations in case of delay or emergency, coordinated with conservation emergency instruction procedures and notifications 6. Evaluation of assistance that might be requested or expected from various police forces

23 Determination of final shipping details 1. Reevaluation, as required, of mode of shipment and route when there is an unacceptable conservation or protection risk 2. Evaluation and selection of proprietary or commercial shipper, including use of hand-carried transit, deliveries and removals, use of mail, common carrier or “exclusive use” cartage, no use of “checked” baggage for objects, meeting objects at the plane, inspection openings, supervision of loading and unloading, leaving objects at the plane, leaving objects unattended, no riders or extra cargo, or unscheduled stops 3. Evaluation and selection of publicly known or surreptitious mode of shipment (no information, markings, notice or publicity) based on the amount of public knowledge, ability to hide shipment and degree of threat 4. Evaluation of selection of kinds of physical security media available, including armored vehicles, shipment containers, security bands and seals conservation requirements and inspections 5. Evaluation and selection of requirement for accompanier, courier, or armed or unarmed escort, separate vehicles, hired security service, local police escort or relays, roadway or special access usage, inspection or customs waivers, and terminal controls 6. Determination of authorities for each person in the transit group with specific instructions, responsibilities, check-in expectations, identification check, confidentiality of information, avoidance of use of monetary values, background checks, behavioral expectations, and emergency expectations and authorities

24 16 Appendix C

Packing Descriptions and Examples

LAYER ONE: Primary Contact

▪ Archival, acid-free materials that come directly in contact with the object are used. ▪ Must be soft, clean, non-reactive, and non-abrasive. ▪ Serves as a barrier from moisture, dirt, and minor fluctuations in temperature and humidity. ▪ Also serves as a buffer between the object and the outer packing support material.

*Objects with fragile surfaces or surface texture do NOT use a primary contact layer.

LAYER TWO: Secondary Softpack

▪ Not necessarily archival materials. ▪ Serves as a structural layer of protection/soft-packing during transit or handling.

*Objects with fragile surfaces or surface texture do NOT use a secondary soft-pack layer

LAYER THREE: Protective Shell:

▪ 3a: Cardboard Layer

o Acts as a rigid protective barrier for minor handling wear. o Recommended for traveling short-distances by hand or by truck, and for temporary storage.

25 ▪ 3b: Wooden Layer

o Provide structural protection to fragile or textured objects without compromising the surface. o Slat Crate (see image below): Skeleton crate made with wooden slats/batons and strategically-placed pads, primarily for sculptures and decorative arts. Can be faced with cardboard, Foam Core, or Coroplast. o Travel (T) Frame (see image below): Wooden handling frame for textured/fragile flatworks. Can be faced with cardboard, Foam Core, or Coroplast.

▪ MOISTURE-SEAL LAYER: All softpack, boxes, shadow boxes, portfolios, t-frames, slat crates, and flat works should be sealed in poly. o Polyethylene: Protective barrier against water, humidity, and dirt; almost always used in conjunction with primary archival or non-reactive layer.

26 LAYER FOUR: Durable Outer Crate

▪ Acts as a moisture-resistant, fully-enclosed protective structural unit. ▪ Intended to withstand a greater variety of hazards an object may face when not installed. ▪ Each company / crate shop uses different techniques and often different materials in their construction.

o Standard Crate (see image below): Simple crate for one-way transport. o Multi-use Crate (see image below): A durable, moisture-resistant crate used for multiple shipments. o Museum Crate (see image below): Fully-insulated, water-resistant crate that can serve as a permanent home for the artwork.

DESCRIPTIONS OF THE 5 MOST TYPICALLY USED CRATES

SLAT CRATE

27 TRAVEL FRAME

STANDARD CRATE

28 MULTI-USE CRATE

MUSEUM CRATE

29 Best practices for common mediums are:

Ceramics – items should be wrapped individually and insulated from jarring and vibration with foam.

Paintings – Should be wrapped in non-reactive material. If bubble wrap is used it should be placed with the bubbles facing out to prevent damage to the painting surface. Mounting brackets in the interior of a hard case are an effective way to reduce damage caused by vibration, jostling and jarring. Note that acrylics, particularly those on panel, are highly susceptible to damage from jarring or vibration.

Works on paper – must be wrapped in nonreactive material. Glazing should be removed prior to wrapping and shipped separately. Care should be taken to secure paper in frames to prevent hinging.

The industry resource for packing and crating is PACCIN. PACCIN (Preparation, Art Handling, Collections Care Information Network): http://www.paccin.org

17 Appendix D

Example wording from Warehouse Liability Agreement

Limitation of warehouse liability: the parties acknowledge and agree that the limitations of liability set forth herein are an integral part of this agreement and that the rates charged reflect such limitations.

(a) The property is not insured by warehouse against loss or damage however caused. (b) Unless otherwise prohibited by applicable law, warehouse shall not be liable for any loss or damage to property however caused unless such loss or damage resulted from the failure by warehouse to exercise such care as a reasonably careful person would exercise under like circumstances and warehouse is not liable for loss or damage which could not have been avoided by the exercise of such care. (c) In consideration of the rates charged, it is agreed that warehouse’s liability for loss or damage to property shall be limited to $0.60 per pound as determined by the actual weight

30 of the unwrapped property, even if caused by the negligence of warehouse; provided, however, that such limitation may be increased upon written request by client. Client acknowledges that client has been provided a copy of schedule b, which is attached to this agreement and provides client with the opportunity to increase the limitation of liability by declaring a value for the property, which will result in a higher rate being charged. If client does not declare a value for the property, it shall constitute an agreement to limit warehouse’s liability to $0.60 per pound. (d) Except with respect to loss or damage to property, the liability for which is governed by section 7(c) above, warehouse’s maximum liability arising out of or in connection with this agreement, including but not limited to liability related to loss, damage or destruction of the contents or premises, shall in no event exceed $100,000.00, even if caused by the negligence of warehouse. (e) Client and warehouse agree that under no circumstances shall either party be liable for any consequential, incidental or special damages or for loss of profits, including but not limited to any such damages which might arise from the loss or damage to the property, even if such consequential or special damages might have been contemplated or foreseeable by the parties at the time of contracting.

IMUA STATEMENT The Inland Marine Underwriters Association [IMUA] is a not-for-profit trade association focused on the commercial inland marine line of business. IMUA was organized in 1930 as a national trade association and rating bureau for all inland marine classes. In 1948 the rating bureau activities of the IMUA were transferred to the Inland Marine Insurance Bureau (now defunct) due to the 1944 US Supreme Court decision in the South-Eastern Underwriters Association case. Today, IMUA is comprised of --

• Members - insurance and reinsurance companies that underwrite a significant portion of the commercial inland marine insurance in the U.S. • Associate Members - companies or organizations that provide products and/or services to the insurance industry.

IMUA is committed to advancing the educational, governmental, regulatory and technical interests of the commercial inland marine insurance industry.

One of the services IMUA provides its members is the publishing of information for use by underwriters, loss control and claims specialists, and other interested parties. The topics covered by IMUA Reports, Bulletins and News Articles are intended to provide an overall awareness of the issues, hazards and exposures associated with a specific industry or inland marine class of business.

Volunteer members of a technical committee of the IMUA or IMUA staff have produced this information. Committee members abide by antitrust restrictions while compiling information.

It is generally not possible to treat any one subject in an exhaustive manner, nor is it IMUA’s intent to do so. No warranties are made regarding the thoroughness or accuracy of the report or any part of it. Nothing in this report should be interpreted as providing definitive guidance on any question relating to policy interpretation, underwriting practice, or any other issues in insurance coverage.

IMUA does not prescribe to its members how to make underwriting or claims decisions, nor does it require that analysis follow any particular format.