Fine art is part passion and part investment. Most fine art hasbeen a lucrative investment for collectors in recent years. This isa good time for agents to provide advice to those who may be new tocollecting.

Those who are new to collecting art and other valuables oftendon't have the same level of risk mitigation or appropriateinsurance coverage that more seasoned art collectors have. Often,this is because new collectors haven't been educated about how toproperly care for and protect valuable works.

If you have clients who are new to the art scene, protect theircollections with these four tips:

Art Storage and Display

Some collectors will overpay for a painting, sculpture orjewelry piece simply to display it, while others buy art forinvestment reasons, and stick it in storage until the market forthat particular type of art rises.

When it comes to insurance, the reasons behind the acquisitionof art do not matter as much as where and how the art is displayed,says Melissa Lalka, worldwide fine arts manager at Chubb PersonalInsurance.

If artwork is hung on an exterior wall, coldness or dampness candamage the piece. Avoid hanging near a heater or fireplace, as theheat causes paint to become soft. Pieces in direct sunlight mayalso fade.

For investment pieces kept in storage, ensure climate control.Canvases become slacker or tighter depending on temperature andhumidity. Lay paintings off the floor and protectively wrapthem.

Transportation

Clients may acquire artwork from a gallery, loan exhibit oranother collector's home. “If the piece is highly valuable, butsmall and portable, the client may be tempted to transport thepiece on his own,” said Steven Pincus, managing partner at DeWittStern in New York and director of the firm's fine art practice.

“Depending on the sophistication of the collector—some havefull-time registrars who keep track of every item in thecollection—our responsibility is to make sure there is properinsurance in place,” he said.

He recommends that collectors hire professional art handlers totransport pieces. Artworks should only be transported byprofessional fine art shippers in air-cushioned,temperature-controlled, fully secured and alarmed trucks. When artis crated for shipment, secure the services of specialized arthandlers to pack up the works.

Appraisal

It is also crucial from an insured value standpoint to appraiseart every 3 to 5 years, given fluctuating values. Collectors shouldrecruit the services of an art conservation consultancy toperiodically examine the work for damage, like chips or fading,which can often be corrected.

Ask your clients to photograph each piece and preserve allrelated documentation, including provenance and title, in a secureplace such as a safe deposit box. They'll need this information forinsurance purposes if the art is lost, stolen or damaged.

Coverage Options

In the event of a loss, art aficionados will want “The Scream”to reflect the Munch painting, not their frustration withinadequate insurance.

Brokers with experience in fine art insurance are in the bestposition to provide advice on an insurer who is qualified to handlethe unique claims that occur involving artwork.

Surprisingly, some art collectors believe they have adequatecoverage under their homeowners' policies. Instead, each pieceshould be itemized on the policy or insured under separate“blanket” coverage.

Write coverage on an “agreed value” basis, in which the ownerand insurer consent to the value of a work of art or othercollectible in the event of loss, theft or damage.

Not only can collectors rest easy that their passionateinvestments are financially protected, but they also receive accessto an insurer's value-added risk management services, such asinfrared home scans to determine potential hot spots or cold spots,which could indicate potential electrical problems that could causea fire or water leaks.