[CPProt.net] Price of Terrorism Insurance Scraps Touring Art Exhibit

[MusSecNetworkCulPropProtNet]

 Price of Terrorism Insurance Scraps Touring Art Exhibit

BY STEVEN LITT
c.2005 Newhouse News Service 
 
CLEVELAND -- Blame it on Osama bin Laden.

The Cleveland Museum of Art has postponed indefinitely a major international
exhibition scheduled for 2006 because other museums sharing the show
couldn't afford terrorism insurance for artworks valued at more than $1
billion.

The decision highlights an open secret in the art world: With art prices
skyrocketing and insurance premiums rising to meet them, it's becoming
harder for art museums to sustain the flow of blockbusters that have been a
fixture of American cultural life for decades.

"If the price of art continues to go up and we continue to have issues about
buying more and more insurance, I don't think any museum is going to invest
infinite amounts of money in exhibitions," said Charles Venable, the
Cleveland museum's deputy director for collections and programs.

The show planned for Cleveland would have been a tour of masterpieces by
19th-century British landscapist J.M.W. Turner.

The Tate Gallery in London initiated the exhibition, which it wanted to send
to Cleveland, the Metropolitan Museum of Art in New York, the National
Gallery of Art in Washington and the Los Angeles County Museum of Art.

The museums decided quietly in December that the show could not go forward.
The news became public earlier this month when Cleveland museum officials
said that the Turner show would not open here as scheduled in June 2006.

Officials from the Metropolitan and the National Gallery said they hoped to
schedule the show in the future but that no dates have been set. Officials
at the Los Angeles County Museum of Art did not return calls.

Lara Raymond, assistant press officer for the Tate, said in an e-mail that
the Turner show was postponed indefinitely because of the insurance gap,
plus "the difficulty in obtaining adequate sponsorship."

The troubles facing the Turner show have become more typical since the
terrorist attacks of Sept. 11, 2001.

"I suspect that many shows have not happened recently because of the add-on
for terrorism insurance," said Peter Marzio, director of the Museum of Fine
Arts Houston.

"Insurance used to be negligible," Marzio said, adding that because of
terrorism, insurance "has gone from almost not being a line item to being
the determinant of whether or not you're going to do a show."

So-called blockbuster exhibitions can cost millions of dollars and involve
shipping highly expensive artworks around the world on commercial flights,
accompanied by couriers from the lending and borrowing institutions.

The Turner show would have amassed 80 of the world's most famous canvases by
the artist, a mid-19th-century visionary whose misty, light-washed
landscapes anticipated 20th-century abstraction.

"We were really talking about a once-in-a-century show," said Heidi Domine,
the Cleveland museum's director of exhibitions.

But with a total estimated value of more than $1 billion, the works in the
project exceeded the capacity of a federal program designed to protect
museums against losses, Domine and Venable said.

Under the federal Arts and Artifacts Indemnity Program, the U.S. Treasury
will pay cash for art that is lost, stolen or damaged in shipment or during
an exhibition in the United States.

The maximum coverage for any single show is $600 million, and the total
annual coverage is $8 billion. Congress upped the amount from $5 billion in
2003.

The total paid out for art losses in the 30 years of the program is
$104,700, said Felicia Knight, chief spokeswoman for the National Endowment
for the Arts, which administers the program.

Marzio, Venable and officials at other U.S. art museums said the government
should raise the federal coverage.

"The history of risk shows that it's very small," said Graham Beal, director
of the Detroit Institute of Arts. "The incidence (of payments) over history
is minuscule."

A factor contributing to the cost of terrorism insurance is that in 2006,
the federal Terrorism Risk Insurance Act will expire. The act, passed by
Congress after Sept. 11, authorizes the government to reimburse insurance
companies for up to $100 billion for losses above a $15 billion threshold.

Because insurers are uncertain about whether the act will be renewed,
they're passing along higher costs to customers, said Robert Hartwig, chief
economist for the Insurance Information Institute in New York. He said those
higher costs undoubtedly affected the Turner show.

In Cleveland, insurance would have accounted for $800,000 of the $2 million
cost of the show, Domine said. The costs were higher for the museums in New
York and Washington because both cities had suffered terrorist attacks, she
said, although she did not have figures. In Los Angeles, the problem was
higher insurance premiums for earthquakes.

The Cleveland museum, with a $700 million endowment, was ready and able to
go ahead, despite the high costs of the show.

"If our partners could have done it, we would have gladly done a Turner show
next summer," Venable said. "But we couldn't pay for the whole show just to
do it here."

Major loan exhibitions organized entirely within the United States are
relatively affordable because directors of American art museums have agreed
not to require terrorist insurance from one another.

March 30, 2005


(Steven Litt is a reporter for The Plain Dealer of Cleveland. He can be
contacted at slitt at plaind.com.)


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