Fine art policies may value damaged works at current market value, but that does not necessarily mean institutions have enough insurance to cover a major loss.
Global art-market sales returned to growth in 2025, rising 4% to $59.6 billion, according to the latest Art Basel and UBS Art Market Report. But the recovery was much stronger at the top end: auction sales of works priced above $10 million jumped 30% globally, while the value of US fine art works sold above that threshold increased by nearly 40%.
For museums and other institutions holding works whose values can shift substantially over time, this creates an insurance problem that current market value wording alone does not solve. Fine art policies may determine the value of a damaged work based on the market at the time of loss, but there still needs to be enough limit available to pay the claim.
Erin Kane, vice president of underwriting at Huntington T. Block Insurance Agency, an Aon company, said that makes regular conversations around values and limits increasingly important.
“We’re always talking to our museums about, if your values are increasing, making sure you’re taking out those higher limits to reflect those increases as well,” she told Insurance Business.
The renewed strength at the top of the art market also makes concentration risk more consequential. A relatively small number of works can account for an enormous share of the value inside a gallery, meaning changes in the valuation of individual pieces can materially alter the size of a potential loss.
Kane encouraged brokers to look not only at total collection values but at where those values are concentrated. A museum, for instance, may have significant value sitting inside one location, so that a single fire, water event or other event could affect a substantial portion of the collection at once. Fine-art clients tend to provide significant detail during underwriting, including “the total values in a gallery space, the total values that they have overall,” alongside information about catastrophe planning, fire protection and security. Robust submissions allow underwriters to see how much value could be hit by a single event and whether the available limit is sufficient.
The exposure is also not confined to any one external cause. Artwork can be damaged during handling, installation, packing or transportation, as well as through environmental conditions. “It’s about a lot more human interaction with the pieces,” Kane said. “How are you hanging them? Do you have the proper temperature and humidity controls? Are they packing and shipping them correctly?”
Kane said she was not seeing broad weaknesses in risk management among US museum clients. Underwriters nevertheless want detailed information on how collections are protected. “The risk management… extends to visitor interaction. It extends to the environmental controls. It extends to the proper fire controls,” Kane added.
Technology is increasingly part of that protection, with museums able to deploy systems that detect unauthorized access, monitor restricted areas or alert security teams when visitors move too close to an artwork. Security detail tend to be highly aware of developments in available technology and are well placed to determine which systems are appropriate for their institutions.
But the underwriting question remains closely connected to value: how much could be lost in a single event, and what protections are in place around that concentration? Kane said institutions typically provide detailed information because protecting the collection is central to their operations.
Even with strong controls and appropriate limits in place, losses can still happen. When they do, Kane said brokers should make sure museum clients understand they do not need to know the full extent of the damage before notifying insurers.
The immediate priority is to mitigate further loss and contact the appropriate authorities where necessary, followed by prompt notice to the broker and carrier so adjusters and other specialists can be brought in quickly.
Asked whether a museum could report a loss too early, Kane said: “From an insurance perspective, I would say no.” Early notice can also be particularly important where a museum is unsure about the severity of the damage or needs specialist support to assess it.
“Reaching out to your insurance broker or underwriter is extremely important because they can help you, especially if you don’t know and it’s your first loss. It can be very daunting,” Kane said.
