Government indemnity for exhibitions
A state's commitment to reimburse the lender for loss of or damage to a work lent to a public exhibition, instead of commercial insurance, to reduce the cost of major exhibitions.
Nail-to-nail insurance for dozens of masterpieces is a large share of a major exhibition's budget, to the point of making some impossible. Several states have therefore created public guarantees: the state undertakes to compensate the lender if the work is lost or damaged during the loan, under a standard agreement, and the borrowing museum buys no commercial insurance, or only for a deductible or an upper layer. In return, the state imposes strict security, transport and conservation conditions, and inspects the premises. The mechanism rests on the same logic as public self-insurance: across many loans and a low loss rate, the state bears the risk more cheaply than the market. For insurers, it takes part of public exhibitions out of the market, and it leaves open questions about the value of the state's implicit commitments.
The United Kingdom based its Government Indemnity Scheme on the National Heritage Act of 1980; it allows British museums to borrow foreign works worth several hundred million pounds without buying commercial insurance for the covered value.
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