Museum Insurance Rates Soar in a Post-Katrina World

California art museums are seeing exhibition-threatening surges in insurance premiums, according to the Jan. 12 San Francisco Business Times.

Sarah Duxbury reports:
Post-Katrina, California is considered a catastrophic zone, and its fine art museums are seeing insurance increases between 40 percent and 300 percent owing to the need to insure against earthquakes. The wide range reflects the value of the special exhibits and loans a museum has at a given time. Such increases will affect California museums’ abilities to borrow works from other U.S. museums and collectors….
The first to suffer will be SFMOMA [San Francisco Museum of Modern Art] in February, when two high-profile exhibits going on display will cost an unexpected fortune to insure. One of them, “Brice Marden,” which comes from the Museum of Modern Art in New York, will cost more than $1 million to insure, sending SFMOMA scrambling to cover the budget shortfall….
Recognizing the threat of surging insurance costs, [Neal] Benezra [director of SFMOMA], [John] Buchanan [director of the Fine Arts Museums of San Francisco] and [Emily] Sano [director of Asian Art Museum in San Francisco] have joined colleagues from the Getty, L.A. County Museum and Museum of Contemporary Art in Los Angeles to plead their case at the annual meeting of the Association of Art Museum Directors at the end of this month.
Insurance is supposed to protect people in disasters. Then, after a specific disaster occurs, future coverage becomes much more costly and elusive for everyone. Museums saw this after the terrorist attacks of 9/11; they’re seeing it again now. The result may be that museums will have to rely more on exhibitions from their permanent collections—not because they want to, but because they have to.