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Microsoft PowerPoint - Collection Insurance Workshop_28Oct2008

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					   Insurance
     Mark Cleeve
Client Relationship Manager
            VMIA
Agenda
 Insurance Principles and Definitions
 APRA Regulation of Insurers
 Property Insurance
 Fine Arts (Exhibition Risks) Insurance
 Borrowers’ Insurance Pitfalls
 Public Liability Insurance
 Arts Victoria Indemnification Scheme
 Summary

            VICTORIAN MANAGED INSURANCE AUTHORITY
Principle of Indemnity
 Agreement to Compensate Another for Loss
   Example: Treasurer’s Indemnity

 Indemnification returns the affected Party to
 their pre-loss Financial Position

 Insurance is a Contract of Indemnity

 Treasurer’s Indemnity is usually supported by
 Insurance

             VICTORIAN MANAGED INSURANCE AUTHORITY
Subrogation
 The Legal Right of the Insurer to Recover from
 the Third Party Responsible for the Loss

 Insurer Steps “Into the Shoes” of the Insured

 Insured Is Obliged to Assist the Insurer in the
 Recovery Action

 ‘Waiver of Subrogation’ relinquishes the
 Insurer’s Rights to Recover
             VICTORIAN MANAGED INSURANCE AUTHORITY
Deductible
 AKA ‘Excess’ or Self-Insured Retention

 Claim Payments are Reduced by the Amount of
 the Deductible

 Use reduces “Dollar Swapping” Premiums and
 Claims

 Encourages Risk Management Practices

            VICTORIAN MANAGED INSURANCE AUTHORITY
Australian Prudential Regulatory Authority

 Regulates Insurers Based in Australia
 Administers the Insurance Act (1973)
 Prudential Standards for General Insurers include:
    Capital Adequacy (Solvency Margins)
    Risk Management
    Reinsurance Management
    Corporate Governance
 Publishes list of Authorised Insurers (www.apra.gov.au)


               VICTORIAN MANAGED INSURANCE AUTHORITY
Property Insurance (ISR Policies)
 Covers: Physical Loss or Damage
 Indemnification: Replacement or Repair
 Potential Sub-limit for Works of Art
 Limited Transit Coverage
 No Cover for Depreciation




            VICTORIAN MANAGED INSURANCE AUTHORITY
Property Insurance Exclusions
  Typically Excludes Damage Due to:
    Wear & Tear, Scratching or Marring, and
    Gradual Deterioration
    Insects, Vermin, Humidity, Changes in
    Temperature etc.
    War, Terrorism, Nuclear Radiation &
    Contamination

            VICTORIAN MANAGED INSURANCE AUTHORITY
Fine Arts - Available Coverage
  ‘All Risks’ of Physical Loss or Damage
  ‘Wall to Wall’ Basis of Coverage
  Agreed Value or Current Market Value
  Coverage for Diminution in Value as the result
  of Insured Damage
  Damage during Restoration Process



             VICTORIAN MANAGED INSURANCE AUTHORITY
Fine Arts - Available Coverage
 Inalienability
 War & Terrorism Risks
 Foreign Currency Extension
 World-wide Coverage for Transit & Static Risks




            VICTORIAN MANAGED INSURANCE AUTHORITY
Borrowers’ Insurance - Pitfalls

 Property Insurance that Does Not include Depreciation

 Perils based Property Insurance Policy Wordings

 Sub-limited Coverage for Works of Art

 Warranties or Policy Conditions where you Do Not have
 Control of Risks

 Cover provided by Insurers NOT authorised by APRA


              VICTORIAN MANAGED INSURANCE AUTHORITY
Public & Products Liability Insurance
Protects the Insured in respect of Legal Liability to a Third
  Party Arising from an Occurrence which results in:
      Personal Injury (Including Death or Sickness) or
      Damage to Property
Includes Reasonable Legal Defence Costs
Insured Parties defined to include:

         Directors, Officers, Employees & Volunteers



                 VICTORIAN MANAGED INSURANCE AUTHORITY
Liability Claims Examples
  A visitor trips and falls on an uneven surface
  Defamatory Artwork Displayed
  A salmonella-contaminated sandwich purchased from
  your café causes food poisoning
  Employee drops and damages an object on loan
  Copyright Infringement



               VICTORIAN MANAGED INSURANCE AUTHORITY
Fine Art Indemnification Scheme
 FAIS is a program of Arts Victoria (DPC)
 FAIS Committee - members representative of a cross
 section of arts agencies - appointed by Arts Victoria
 Reviews/approves applications for indemnity by
 participating galleries both State agencies and Local
 Government funded agencies
 Survey/accreditation process for all participants
 Indemnity supported by Insurance provided by VMIA




               VICTORIAN MANAGED INSURANCE AUTHORITY
Summary

Insurance is a Contract of Indemnity
Fine Art Policies provide broader coverage than ISR
Depreciation is an essential cover for Artefacts
Avoid Warranties or Policy Conditions where You Do Not
have Control of Risks
Avoid Insurers NOT authorised by APRA
When in Doubt call VMIA!



            VICTORIAN MANAGED INSURANCE AUTHORITY

				
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