Out with the old

As summer begins, antiques dealers take to the road to fairs across the country. Veronica Cowan finds out about the risks their insurers face

Publicity for the BBC's classic Lovejoy series on DVD describes antiques as "the new rock 'n' roll of daytime television". But Lovejoy himself will not be watching, for he is likely to be on the road. The antiques fairs season is under way - most dealers have no shop, relying on fairs to buy and sell. Some are huge exhibitions: big organisers like Haughtons, DMG, Galloway's and Penmans stage high-value fairs at prestigious venues like Alnwick Castle, Stoneyhurst College, Scone Palace and Grosvenor House.

According to the Antiques Licensing Authority, more than £741m worth of art and antiques is stolen in the UK each year. So does this increase when traders are carrying such items around the country, and displaying them on stands and stalls?

Thefts

"Most fairs do suffer from the theft of small portables like snuff boxes, which are more vulnerable at fairs," observes Alexandra Smith, operations director at the Art Loss Register. And a particularly vulnerable area is jewellery, explains James Scott-Brown, managing director of Authentica Adjusting. "There has been a good spate of jewellery thefts, targeted at those attending fairs, primarily by a gang in Banbury and in the Midlands. The gang knows which bags to go for and which cars to follow."

This has led to many insurers requiring smaller items of silver jewellery to be kept locked in showcases at fairs, notes Alexander Rich, account executive for Blackwell Green, part of the Heath Lambert Group. And 'distraction theft' is quite common at fairs, says Robert Read, fine art underwriter at Hiscox, as only one or two people are usually manning a stand.

Such losses are likely to be borne by the dealer's insurer rather than the venue's, and the dealer would also need third-party liability cover - lest a grandfather clock fall over onto a viewer. However, the organisers could be liable if a stand collapses - or if they allow expensive objects to be shown in a temporary structure with "flooring that is too bouncy, making an object fall, or where there is not enough space, leading to damage", according to Mr Rich.

Dealers with shops should have commercial policies, but those selling only at fairs have to store goods somewhere, and may keep items at home.

These would not normally be covered under a household policy, notes Royal & Sun Alliance household account underwriter Keith Macgregor: "If they take the antiques and pictures to fairs, it would be classed as business stock, even if they are on the walls of their houses the rest of the time; and if they are running a business, they have to disclose it."

This niche market is covered by providers like Besso, which has a special fairs policy tailored to the needs of traders, reports Michael Collinson, director of Besso's international division. This covers the business contents of the dealer's premises on an 'all risks' basis and can be extended to cover exhibitions, fairs, the premises of repairers and restorers, private and commercial clients' premises, auction rooms, the dealer's own residence and anywhere else in the world. It has an affinity scheme with Lapada, the London and Provincial Association of Dealers in Art and Antiques.

Goods in transit

Getting to and from antique fairs means valuables are exposed to greater risk than in a shop, but Mr Read says most dealers' annual policies would have an extension for transit and exposure at the fair. Exclusions differ, but most policies cover goods in transit provided the vehicle is locked and secured, while others require the vehicle not be left unattended.

The other particularly vulnerable time for thefts is the hectic "build-up and break-down" of a fair, explains Mr Rich. This is also the time when damage often occurs. Howard Kingston, head of the fine arts and specie team at Zurich, says damage from handling is a major hazard: "At commercial fairs, the setting-up and taking-down is very busy, especially with smaller fairs where the dealer does his own packing. We pay for restoration and depreciation in value."

So can antique dealers go to as many fairs as they like and still be covered? Peter Clifford, associate director of Aon Artscope, explains that while limits aren't imposed on fair numbers, dealers are asked up front which fairs they have committed to. Specification is sought but inevitably last-minute calls for cover are received over the phone, as dealers decide to attend a fair.

Defective title?

Another aspect of security relates to authenticity, and Ms Smith says the larger organisers have strong vetting committees: "They get the trader to sign a contract guaranteeing that they have a right to sell the items. Regional fairs tend to be more of a problem, attracting many more people, and there is not so much pressure to do due diligence checks. Fewer and fewer insurers are offering defective title cover."

The Besso policy does, and indemnifies against loss resulting from goods purchased in the course of normal trading for which it is subsequently discovered the vendor had no legal title. But prevention is better than cure, says Robert Elmer, managing director of the Antiques Licensing Authority, who believes all sellers of art and antiques should be required to keep a register of every antique bought and sold, and have a transponder - a "passport" - inserted in the item. However, Mr Read observes that there have been many attempts to bring in schemes, but not everyone will get a passport, so they fall down.

One dealer, who did not wish to be identified, says that insurers require too much paperwork when there is a loss, and that this doesn't reflect the informal nature of some of the deals. Mr Read acknowledges this, especially in cases where more than one dealer has a share in an item, but adds: "We would still expect a receipt from an auction house and the dealer needs a paper-trail to substantiate a loss." Mr Scott-Brown says a lot of dealers have a stock book, entering everything that goes in or out, "but at a fair they can sell for cash, and when an item is shared, the loss adjuster has to work out who owned it".

Broking information required for antiques trade fairs/exhibitions insurance

- Name of the event to be insured

- Dates - including setting up, dismantling and transits

- What value is being taken? Does the insured have a full inventory of all the stock being taken? What is the basis of valuation for these items?

- Is it a well-established event?

- Who is shipping/packing items?

- Are items going by road, air or sea? Will they be adequately packed?

- Are condition reports available?

- Is terrorism cover provided for items away from the insured's premises, including time in transit or outside the UK?

- Is there adequate cover for insured's unattended vehicles? Will the vehicle be unattended in the loading bay?

- Will the stand be attended at all times during opening hours? What is the security at the exhibition? Is there controlled entry? How many guards are there? What is the out-of-hours security?

- Are there any additional protections available for the stand - such as alarms, screens, safes, locked showcases?

- How will the items be displayed on the insured's stand?

- Is cancellation cover required?

- What would the insured's unrecoverable costs be in the event of non-attendance?

- Are there any specific conditions for this event and can they be met?

Source: Blackwell Green (part of Heath Lambert Group).

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