Art theft
The risk of an artwork being taken, by burglary, theft during an exhibition or misappropriation, whose underwriting turns on concentrated value, the difficulty of resale and the risk of ransom demands.
A famous artwork is almost unsellable on the open market, yet it gets stolen: thieves aim at cheap resale through criminal networks, use as a bargaining chip or collateral, or a ransom demanded from the owner or its insurer, a practice the market calls artnapping. For the insurer, theft is a low-frequency, extreme-severity risk, concentrated in a few locations. Underwriting looks at physical security, alarms, display cases, guarding, response times, at access procedures for storerooms and at discretion around values. Policies often provide for rewards for information and a buy-back clause: if the work is found after payment, the insured may take it back by repaying the indemnity. Many large public institutions do not insure against theft, which leaves the entire loss with the public.
On March 18, 1990, two men disguised as police officers stole thirteen works from the Isabella Stewart Gardner Museum in Boston, including a Vermeer and three Rembrandts, valued at some 500 million dollars; the museum was uninsured and has offered a 10 million dollar reward since 2017.
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