posted by Michael Fahlund
Professional liability insurance is essential for art authenticators, appraisers, scholars, artists, curators, and other practitioners in the field of visual art and art history. In today’s increasingly litigious environment, professionals are often subject to lawsuits brought by unhappy clients or other parties who feel they have been harmed by the actions—or inactions—of individuals who worked for them. The financial consequences of such suits, including the costs to defend them, can be devastating. As a result, it is critical that professionals recognize their exposures to financial losses and adopt effective means to deal with them.
Herbert L. Jamison & Co. LLC, a provider of professional liability programs, and Philadelphia Insurance Companies are now offering a comprehensive, affordable professional liability insurance solution to art authenticators to help defend against a damaging financial loss that could occur from alleged mistakes or negligence in conducting professional, fee-based services. Though premiums vary depending on circumstances, the annual premium of one policy—which insures an individual engaged in authenticating works up to $500,000 in value—is $1,000 with a $2,500 deductible.
Several key benefits of this program are:
- Automatic independent-contractor coverage for professional services while acting on the insured’s behalf
- Defense costs in addition to the limit of liability for eligible risks
- Policy coverage for a lawful spouse or domestic partner of the insured, but only for actual or alleged wrongful acts of such individual insured for which said spouse or domestic partner may be liable as the spouse or domestic partner of such insured
- Tailored policy to meet the specific need(s) of clients
- Free sixty-day discovery clause
- Worldwide coverage
Sometimes insurance protection is not enough. The art professional must establish and maintain a loss-prevention program that will help minimize the chance of a professional liability claim being brought in the first place. Examples of effective loss-prevention techniques that can be adopted include:
- Establishing the fees and/or billing practices at the beginning of a client relationship
- Using engagement letters, contracts, and other means to precisely identify the scope of the services to be performed
- Keeping written documentation of all activity, including telephone calls, billing calculations, and the like
- Participating in peer reviews, when feasible
- Avoiding situations that present conflicts of interest
- Obtaining appropriate credentials and certifications and taking continuing-education courses to remain current regarding developments in the profession
- Screening new clients carefully and keeping existing clients informed at all times
- Avoiding giving specific warranties and similar performance guarantees
A well-designed combination of insurance and loss prevention will go a long way in managing the potential liabilities that art professionals must face as they deliver their services to their clients.
CAA recommends that interested individuals contact Kevin J. Hill, vice president at Herbert L. Jamison & Co. LLC, at 973-669-2388 or 800-5264766, ext. 2388.