Chris Johnson of Johnsonese Brokerage: How to Insure Your Art

Today’s post was written by our wonderful friend and business insurance guru, Chris Johnson. He’s the owner of Johnsonese Brokerage in Chicago and has helped us tremendously over the years. He was kind enough to explain the process of obtaining insurance and also share some inside stories.

What are the general steps to getting art insured?

The biggest step is probably determining the value of the art to be insured. Collectors simply have their collections appraised. For an individual artist the process is a little more challenging because their art inventory is continually changing. So they need good records to document the value of their art. This can be copies of gallery contracts, for example, that list the consigned value of their artworks over time. Or if they sell directly, it can be sales records showing selling prices over time. For more established artists, it can be auction records or appraisal reports for specific works.

The next step is simply to find an insurance agent that understands the business of art. The insurance agent will work with the artist to determine what level of insurance coverage is appropriate for the artist. This is basically the highest dollar value of artworks that you might have at your studio (or elsewhere) at any given time. You also need to be concerned with coverage for your artworks while in-transit. Most art insurance policies have a separate, and usually lower, sub-limit for coverage of art while it is being shipped. The limit should be high enough to cover the highest value of art that you would include in any one shipment. Think of how much you might ship for a gallery show or art fair, not just individual artworks being shipped to buyers.

You also need to think about international coverage. The typical policy provides coverage in the US and Canada. If you will be selling internationally or participating in international art fairs, you should add international coverage.

What are some of the types of clients you insure?

In the Fine Art world, we insure galleries and private dealers, auction houses, corporate and private collections, framers and conservators, and individual artists. We also insure traveling museum exhibits, which I think can be the most fun because we sometimes get to see the exhibits before the general public.

Share an awesome art story disaster with us!

You won’t be surprised to learn that Charles Saatchi is not my client. But I can’t help finding the story of the demise of his Marc Quinn sculpture a little amusing. The sculpture was made from the artist’s own frozen blood, so Saatchi had it kept in a freezer. During maintenance at his house the power was disrupted and the sculpture melted. The darkly amusing part to me is that Saatchi is married to celebrity cook Nigella Lawson. So I can’t help imagining this work of art melting all over some amazing dinner that Nigella had whipped up for a party.

Marc Quinn, Self, 2001, Image: The Art World Daily

But for my real clients, the day to day claims are things like water damage, damage in shipment, damage during installation or packing, and even red wines spills at gallery openings. I did have a gallery client experience a pretty major loss when there was a fire two floors above them. The fire was quickly contained on the higher floor, but about half of my client’s inventory was water damaged. I had another client have sewage back-up literally in their gallery. Most of the work was high enough that the damage was limited, but still expensive.

Who are your favorite artists?

I like and collect a few local artists who aren’t well known. But to have some fun name dropping, probably my favorite living Chicago artists are Karl Wirsum and Theaster Gates. In looking at all of art history, I have eclectic tastes. I like El Greco, Vincent van Gogh, Jackson Pollack, Andy Warhol and Cindy Sherman.

But if I could own any artwork in the world, I might choose Picasso’s Guernica.

Pablo Picasso, Guernica. Paris, June 4, 1937. Oil on canvas, 349.3 x 776.6 cm

Thank you, Chris, for sharing your expertise on taking care of our investments! You don’t have to be in Chicago for him to help you. See the full list of licensed states here. To contact him about your own collection or business, call  773.857.0242 or email him at info@johnsonese.com

Johnson is a licensed insurance producer with a background in corporate finance, business planning, technology commercialization, project management and international business. Johnson focuses on serving clients in the arts community, building on his four year experience as director of a contemporary fine art gallery in Chicago. During this time he was also a founding member of a neighborhood gallery association, and he completed a Certificate of Connoisseurship in Fine & Decorative Arts at Northwestern University. In his insurance practice Johnson works closely with art galleries, antique dealers and framers to protect and build their businesses.

Wanna Be Startin’ Somethin’ : Opening Your Own Art Business

Ever thought about going into business for yourself as an artist? You sell a painting/sculpture/photograph/________ , cash the check and go on your merry way, right? Sorry, folks.

Chin-Azzaro business card

You have to pay taxes on that income. If you offer a service, you should have insurance (the liability kind, not just the medical kind). And if you want to be legitimate, you need to file a business license with the city clerk. All of this sounds like no fun, cost and headache. But once you get over these hurdles, you’ll not only be offering your clients a great piece of work, but yourself peace of mind. And that’s invaluable. Here are a few tips to get you started.

BUSINESS PLAN – Maybe your service is just as easy as selling paintings. But if you’re struggling to find your niche market or you’re new to an area, drawing up a business plan is a good idea for anyone. Outline your purpose and mission, goals, key demographic, costs and how you’re going to achieve it. Even on a very rough basis, writing this out may give you clarity that you didn’t realize beforehand.

INSURANCE – I don’t know all the ins and outs of the type of coverage you need, but you do need it. Imagine a slip and fall on the job, it could be you or someone else tripping over an easel you set up. A lawsuit could wipe you out financially. Or, say you offer advice and it turns out to be faulty and a client sues you for defamation of a work. Perhaps you feel that you can’t afford insurance as a small business owner or if you’re working for yourself. But you can’t afford not to have it. I would suggest checking out Johnsonese Brokerage for a start. They specialize in coverage for the creative community and know how to deal with every artist’s situation.

LICENSE – Every city and county has a different set of forms to fill out. Most will require a business license that can be easily found on line or at the city clerk’s office so that you can conduct business transactions, period. There’s generally a fee associated with filing, but every city varies.  Also, check the IRS page here to figure out what kind of business you are and to get an employer identification number (EIN).

TAXES – There are two very important things to remember as an artist working for yourself. The first is to keep track of your expenses including all costs associated with running your business. Did you take a client out to dinner? Keep the receipt. Do you buy your own medical insurance? Keep track of all costs including prescriptions. Categorize them and tally them so you have them organized for your accountant. Which brings us to the second important part – get a good accountant. Not someone that just plugs numbers but someone that knows what numbers to plug. When you work for yourself, there are certain deductions and benefits that should be taken into account and not everyone will be savvy on what questions to ask.

Another good rule of thumb is to put aside 30% of your earnings to pay for taxes later on. It’s a huge chunk but it’s the only way that you can be on the safe side come tax time. The alternative is to pay by installments when you owe. And being an artist that gets paid by in full – believe me, you’re going to owe.

Branding, Marketing and Publicity - three monsters to conquer

LAW – Sooner or later, you’ll have a question that only a lawyer can answer. If you’re going into business as a self-proprietor, you could probably get by with advice from a family lawyer or friend. But if you’re starting a brick and mortar store, you’ll have to hire one.

BRANDING – Branding, marketing and publicity are a whole other set of monsters. If you’re not confident that you can do it yourself, hire or barter with a graphic designer friend. Don’t think that you can do it yourself just because you want to. Think of the tone-deaf singer on American Idol – everyone knows they’re horrible except themselves because “my mom tells me I’m a great singer…” This is one of those times that you let the experts do it. I’ll do a longer post on this soon.

Today’s post isn’t meant to be a downer, but simply a quick to-do list that will get you heading in the right direction. We’re traveling on the same path so we feel the lows and highs of starting out. Let’s go on this trip together.

-Y-