Introduction

There is no legal imperative for an owner of a cultural asset to insure it, but insurance is often required by institutional rules or is just good practice. In essence, insurance is a commercial contract between an insurer and the insured, typically providing against loss or damage in return for a fee or premium. Even if a collection is not insured in situ, insurance will normally be required when objects leave the premises and are in transit or on loan. Some types of loan may not be insured, but in general, cultural items will be fully covered when away from their home location. Insuring cultural heritage items, however, is far from simple. Each item is unique and faces different types of risk and it is difficult to estimate how damage, if it occurs, may affect value.

In 1941, the London gallery Guggenheim Jeune held an exhibition of paintings by Kandinsky. They were contacted by a teacher who asked to borrow some of them to show to the children in his school. The gallery agreed, on condition that they were insured for the journey, and consequently they were strapped to the roof of the car and driven away. This may suggest that, even in 1941, the gallery recognised the importance of insurance even if their willingness to take a risk with the art may have been quite different from today.1 Some lenders, and even some artists, may not see the need for insurance, believing that a public institution can be trusted to take care of their items. But many things can go wrong and publicly held collections, responsible for items in the public domain, are more or less obliged to insure, except under certain circumstances.

National collections are not insured in situ on the grounds that the Government cannot insure itself. Items on loan from one national institution to another cannot be indemnified for the same reason, but loans from non- national institutions can be covered by UKGI. National institutions may also, at their discretion, require only ‘first loss’ (see Glossary) for loans to nonnational organisations, to the extent of the terms offered by Government Indemnity. There are sometimes ‘non-insurance’ agreements between public institutions, but these are individual arrangements, decided on a case-by-case basis; see Chapter 5, Alternatives to insurance.