Editor’s Note: Stephen Halbeisen, chair of Cozen O’Connor’s Subrogation & Recovery Department’s South Central region, contributed the article below.  

Fine art losses come in many shapes and sizes. Often, fine art is a relatively minor component of a homeowner’s or commercial property claim. Occasionally, however, damaged art represents the vast majority of a claim. You may have heard of the story in 2006 about casino mogul Steve Wynn, who accidentally poked a hole in his own Picasso painting, “Le Rêve,” which he had previously agreed to sell to another collector for $139 million. Given the impact of the damage on the painting’s value, Wynn decided to keep the painting after conservation. 

In the context of subrogation, when a property loss results in damage to real property, personal property, and works of fine art, it is all too easy to focus the investigation solely on causation and responsibility for the loss. For the inexperienced claims or subrogation professional, however, proving damages can be an afterthought. In order to maximize your potential subrogation recovery on a claim that involves works of fine art, understanding the recoverable measure of damages and hiring the right damages experts are as important as proving the cause of the loss. 

When a loss involves damage to a work of fine art, the nature and extent of the damage must be evaluated quickly. Was the art completely consumed in a fire or was it damaged by smoke, humidity, water, or physical impact? The nature and extent of the damage will dictate the response by claims and subrogation professionals. For example, water damage to a Mark Rothko oil painting requires a different response than smoke damage to a rare Ansel Adams photograph. 

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