Bad Faith Insurance & Fine ArtPosted December 13, 2016
Not only does insurance apply to homes, injuries, cars, and other property, but it also applies to fine art. With fine art insurance, companies typically provide coverage for the collector, museum, organization, dealer, etc. These insurers pride themselves having a special understanding of the quality and value of fine art, and this special understanding is supposedly reflected in the insurance contract covering loss.
Yet insurance companies covering fine art have to abide by very particular rights, or they face being sued by both the original artist and/or the owner of the art. And what many art collectors may not realize is that purchasing the art is only the first step; art insurance often becomes an important part of collecting art, necessitating that collectors understand the law behind where fine art and insurance intersect.
The Visual Artist Rights Act
If a work of art is damaged, the Visual Artists Rights Act (VARA) may apply–not only in terms of liability–but also what is permissible in terms of restoration. VARA is a federal copyright law granting protection to moral rights; specifically, rights held by the art’s author(s) regardless of subsequent physical ownership of or copyright to the art. Under some circumstances, it allows the author/painter to sue the owner of the painting for destroying it.
VARA also grants rights to artists/authors, such as the right to claim or disclaim authorship in artwork, limited/qualified rights to prevent modification, distortion, and mutilation of the work, and the right (under some circumstances) to prevent destruction of a work of art that is incorporated into a building. Artists can, of course, explicitly waive their rights under the Act instead.
Insurers & Bad Faith
Existing case law dictates that attempting to repair or restore art without first obtaining the artist’s permission is a violation of VARA. Thus, any insurer involved in art restoration must first make a good faith effort to obtain artist approval before a restoration plan is approved. Otherwise, any modifications may technically be found to be impermissible and/or performed with gross negligence.
Although this has not been a frequent subject of litigation, there are issues that could rise to insurer liability when it comes to VARA. For example, if artwork is restored without first obtaining input from the artist, the insurer could be found directly liable to the artist. In addition, there could potentially involve liability for breach of contract or bad faith. The artist could also completely denounce the work, thus rendering it worthless, and if the work is rendered useless due to this modification, this could give rise to potential bad faith claims brought against the insurer.
Bad Faith Insurance Attorneys
If you’ve been the victim of impropriety by an insurer, we’re here to help. Our attorneys focus exclusively on bad faith insurance litigation and making our clients whole again if they have suffered due to insurer negligence. Contact us today to find out how we can help, (405) 272-0303.