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Art just for art’s sake? Insurance issues flood art market post-Sandy

Thu Jan 10th, 2013 on     Insurance Claims,    

Hurricane Sandy wreaked havoc with many things this past fall. People in Florida and all up and down the coast watched with dismay as the storm battered many parts of the country, killing 132 and causing damage to property. Communities are still struggling in the storm’s aftermath. The total cost to the insurance industry of all claims arising from the storm is expected to be close to $25 billion, almost rivaling the costs experienced when Hurricane Katrina hit in 2005.

One difference with Sandy was that she hit a major metropolitan area that was simply not prepared for the kind of flooding that occurred. New York, and Manhattan in particular, are densely populated with businesses that, it seems, hadn’t really thought about what would happen if the island was hit with a 12-foot storm surge, much less the 14-foot storm surge brought by Sandy. And, some of those businesses had highly unusual — and irreplaceable — merchandise. Like, for example, art galleries.

Insurance companies say payouts may top $500 million on claims related to artwork lost or badly damaged as a consequence of Sandy. Both art warehouses and galleries were damaged by flooding caused by the superstorm.

Manhattan is dotted with thousands of galleries of all sizes, and some neighborhoods known for their concentration of art venues were hit hard. A number of larger art galleries suffered significant losses. The work of just one major artist, Peter Max, the illustrator and graphic artist who rose to prominence in the 1960s, accounts for a full $300 million in claims. To date, the Max collection is the biggest single art loss claim resulting from Hurricane Sandy.

We’ll continue this in our next post.

Source: Insurance Journal, “Art Insurers Face Record Loss from Superstorm Sandy,” Sarah Mortimer and Myles Neligan, Dec. 21, 2012

Our firm helps businesses in the Miami, Florida, area with insurance claim disputes arising from events like Hurricane Sandy. If you would like to learn more about our practice, please visit our website.

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