When art has no premium

Last year, India's first wholly indigenous auction fetched a whopping Rs 2.5 crore, with Raja Ravi Verma's The Begum's Bath alone going for ...

Last year, India8217;s first wholly indigenous auction fetched a whopping Rs 2.5 crore, with Raja Ravi Verma8217;s The Begum8217;s Bath alone going for Rs 32 lakh. The turnout at the auction and the enthusiasm of over 200 bidders proved that the art-buying culture was firmly established among India8217;s elite.

But while there has been a substantial growth in the country8217;s art market over the last few years, awareness about and the practice of insuring works of art is conspicuous by its absence. And unlike the West, Indian artists, galleries and private collectors don8217;t seem to think too much about the risks involved in keeping these expensive creations without the security of an insurance cover. quot;The biggest problem is that there is no professional art insurance in this country. We provide valuation services for the purpose of insurance in other countries. But here, most people want to put an off-hand value, and we can8217;t give fictitious figures or undervalue a work of art,quot; says Amrita Jhaveri, Christies8217;representative in India.

A fact endorsed by others in the business. quot;People are selling works of the bigger artists at a lower cheque price while the rest of the amount is paid in cash. So it is very difficult to put a price on any painting ,quot; says Gallery 78217;s Arun Sachdev.

And this is what makes insurance companies wary of providing cover for art. Since there are no experts in the insurance sector dedicated to evaluating painting or sculpture, companies ask their clients to authenticate the exact worth of the work. quot;Since the entire transaction of insuring art revolves around valuation, we need a valuation certificate. And this certificate must come from expert valuers 8212; either museum curators or valuers attached to recognised galleries like the Jehangir Art Gallery,quot; says P R Kumar of The Oriental Insurance Company Limited.

In a business where there are no standard price lists, insurance companies often have to go by an artist8217;s track record and his approximate worth in the market. quot;If a painting hasbeen purchased by a private party, it is possible to get the purchase receipt. But otherwise we just have to play by the law of averages,quot; says Dr P M Ugaonkar of The New India Assurance Company Limited.

And a higher risk factor for the company means higher premiums. So depending on the number of risks covered in the policy, the premium could be anywhere between three to four per cent. quot;In other sectors we have at least some mode of recovery, here it is not so. Besides there is nothing like a partial loss when it comes to a work of art. So we are extra careful about choosing our clients. An artist may even buy a policy because he is unable to sell his painting and then come back with a claim,quot; says Kumar.

And this fear is not entirely baseless. There have been cases where artists have made a quick buck on their insurance policy. quot;A bronze idol which arrived at our gallery for an exhibition, came with a cracked base. Naturally, we refused to accept the piece. But the artist claimed insurance for the damageand then auctioned the idol as well,quot; says Pheroza Godrej, director, Cymroza Art Gallery.

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Her8217;s is among the very few galleries in the city which insure every consignment that comes in for an exhibition and has done so for the last 25 years. quot;We have our gallery insured against fire, theft and even riots. We added the last risk after the riots a few years ago because we have several glass windows. And in case of damage to glass there is a danger of ruining a work on paper or a glass sculpture,quot; she says. And while insurance comprises a large part of the gallery8217;s budget, Godrej says that she has had to put up a claim just twice. quot;But it still makes good sense because if I have to get a work restored it would be a very expensive and tedious process,quot; she says.

But in an atmosphere of mutual distrust, most others prefer not to approach insurance companies for cover. While several corporate houses and private collectors prefer to include art in their general insurance policy, galleries don8217;t even feel theneed to do that. quot;We find insurance a big hassle, especially since we rarely keep paintings in the gallery for very long. We don8217;t insure even our best works because we know that if we have just brought in a Husain, it will be sold off in a week8217;s time,quot; says Sachdev.

So the need for risk cover arises predominantly while the works are being transported from one city to another for an exhibition. quot;In case of goods in transit the most important factor is packaging. For example, in case of an oil painting, you can8217;t afford to have the canvas rub against the packing material. To ensure maximum safety, we have our representatives supervise the packaging, handling, loading and unloading of each consignment. And we prefer to have the package transported either by air or through a courier service,quot; says Kumar. That is because in case there is a claim for insurance, both carriers and couriers are liable for damages.

But by and large, insuring art is a concept that has yet to catch on in India. quot;Very few people inIndia know the actual value of art. So even a thief wouldn8217;t know the worth of a painting or whom to sell it to. But with growing awareness and increase in art sales in the country, people will gradually start taking art insurance seriously,quot; says art dealer, Ashish Balram Nagpal.