With healthcare costs rising and the promise of so-called “healthcare reform” only a vague plank in political platforms, what’s a self-employed artist to do? That was to be the sole focus of this month’s column, but then I was faced with the intriguing question of how to insure my artwork while in transit to an exhibition. So, I’ll tackle both insurance dilemmas.

Is there strength in numbers?
Conventional wisdom tells us that group insurance policies are less expensive than individual policies. We then assume that individual artists (those not married to spouses who bring home the benefits) will necessarily pay more for health insurance. We also assume that an association of artists might get a better deal on insurance. That’s not necessarily the case.

“A self-employed artist is like any other independent contractor,” says Ernie Sweat CEBS, a benefits consultant with Fringe Benefit Analysts. “An individual policy may be your best option. The problem with groups is that there may be members of the group who are less healthy than others, thus posing a higher financial risk to the insurer. The policy for the group may be priced higher so that the insurer can be sure the income from premiums will cover the cost of claims.”

Some people, due to health issues, may not qualify for an individual policy. In that case, suggests Sweat, the artist may form a limited liability corporation (LLC) with their spouse or other artists as members of the LLC. The LLC can then apply for group insurance with as few as two members. There are some insurers that guarantee to cover a group, though their premiums may not be as affordable as you’d like. The insurance underwriter will look at the health information submitted on applications by members of the group before quoting a price. If you want to explore the LLC route, you’ll need the help of a qualified lawyer and accountant to help you form the LLC and make sure your accounting and tax filings comply with applicable laws.

Another option for artists who cannot get individual insurance is the state comprehensive health insurance pool (HIP). Under this program, the insured member pays a portion of the cost and the remainder is paid by a combination of state and local government. The rates are high and the benefits are not great (such as high deductibles, lack of office co-pay and drug card), but you may take comfort knowing that your catastrophic health care costs will be covered. For more information visit www.selecthealth.org.

Do you have insurance tips to share? Send me an email and I’ll share the information in a future column.

Should I insure my artwork, and, if so, how?
Recently, I sent a painting to my son for his birthday. While arranging for the shipment with my UPS store, the clerk informed me that UPS would not insure the value of my painting, other than the frame, glass, paper, or canvas. “Unless, your painting is appraised,” she explains, “we have no way of verifying the value.”

Since I’m not yet in the “big leagues” commanding five or six-digit prices for my work, this information came as neither a shock nor a disappointment. But it did start me thinking about disasters and losses involving my own work and that of artists who are way ahead of me in the price/success scale. So I called The Hartford insurance company, from whom I purchase a standard business liability policy.

A helpful underwriter there told me essentially the same thing I heard from the UPS clerk. Most insurance policies will require an itemized list (schedule) of the works to be included in the policy; they may also require a written appraisal of each piece if you want to get more than the cost of canvas and paint in case of loss or damage. This would mean, of course, that you would need to constantly update your list and appraisals as you add new work to your inventory.

On the other hand, I was glad to learn, my basic business policy covers my business property up to a reasonable amount, which at my current level of production and sales, would be sufficient to reimburse me for my materials, at least, in case of catastrophe. My accounting program, into which I enter my costs of materials, would help substantiate a claim.

There’s also something called an “inland marine policy for fine art,” which is personal property coverage for various kinds of “moveable” property, including fine art. It differs from your homeowners policy in that it covers your artwork wherever it is – in transit, in a gallery, an arts festival, etc. A sales representative at The Hartford told me items covered on an inland marine policy must be listed on a schedule, and to be sure you will get full value for a piece lost or ruined, it must be appraised. Inland marine policies start at about $2,500/year and can go up to hundreds of thousands of dollars.

The other tricky thing about insuring work in transit is that policies may not cover transportation by a private vehicle, i.e., not a commercial carrier. So, if a friend volunteers to transport paintings to a show, your work may not be covered for loss or damage.

So what do artists do about insurance? I have only anecdotal information, no comprehensive statistics. One artist couple I know told me, “We can’t afford to insure our artwork.”

Utah artist Joseph Alleman has this approach: When shipping art to a gallery, he insures it for the cost of the frame. If the frame is damaged, which has happened, the gallery repairs or replaces it, then Alleman submits a claim. When shipping a piece that a client has already purchased, he insures it for the full retail value. The sales receipt is his proof of value if he must submit a claim.

The bottom line – take reasonable precautions with your own health and with the handling of your artwork. The healthier we are, and the more careful we are with our work, the less likely we’ll suffer a loss – with or without insurance.

Sue Martin

Sue Martin holds an M.A. in Theatre and has worked in public relations. As an artist, she works in watercolor, oil, and acrylic to capture Utah landscapes or the beauty of everyday objects in still life.