Art insurance can be bought by anyone who has insurable interest in the piece of art such as a sculpture, painting, or a print. Insurable interest of the insurance buyer simply means that as a consequence of damage to the insured art, the person paying for the insurance will suffer a monetary loss.

Insurable interest of an Art Collector

An individual, who buys art with the intention of re-selling it to a bigger buyer, can be said to have insurable interest in the art, and so he can buy art insurance.

Insurable interest of an Art Gallery Owner

A person who displays art of a famous artist in his art gallery, to find a better price for it, by arranging a ‘buyer – seller’ meet in the gallery is said to have insurable interest in the art.

Case on Buyer’s Eligibility for Art Insurance

Consider the case of Kush. Kush is an art collector who bought a few paintings from a well-known artist known as Kartik. Kush’s brother Abhishek is an insurance agent. Abhishek wants to gift the insurance policy to Kush after 3 months that is on Kush’s business anniversary date.

In this case, Abhishek cannot buy the insurance all by himself, as he has no insurable financial interest in the painting.

In another case, let us assume that Kush is an art gallery owner who has stored Kartik’s work of art in his gallery. Kush is worried about the art being spoilt, stolen or damaged because recently, there have been cases of vandalism in the neighbourhood.

Kush’s friend Amit visits his gallery to say ‘Hi’ and he sees Kush in a worried state. Kush invites Amit for a cup of coffee and tells him about his predicament. Amit says – do not worry, I owe you some money anyway. So let me buy art insurance policy for your art gallery as well as the art stored in it. Kush agrees and thanks Amit for his generosity.

Amit cannot buy the insurance policy for Kush’s art gallery as he does not have an insurable interest in its welfare. However, Kush himself can insure the gallery and the pieces owned by him.

Genuine insurable or financial interest must be proven at the time of buying the insurance, if such an interest exists.

Click here to know what is not covered under Art Insurance