Public Art Insurance: What you need to know

NEFA partnered with the Arts & Business Council of Greater Boston (A&BC) for NEFA's Public Art Discussion Series event, The Business of Being a Public Artist. Jim Grace, Executive Director of A&BC, led the four-hour workshop on February 6. Public artists and administrators asked insightful questions, participated in lively dialogue, and came away with applicable advice and helpful tips. In the following weeks there will be three blog posts focusing on the topics of the workshop: insurance, contracts, and budgets. 

Chris Hawthorne, Vice President of TGA Cross Insurance, gave an engaging presentation about the insurance needs of public artists and the options available to them. The following is a summary of the lessons learned from the insurance session. 

For those that missed out or those that want to learn more about public art insurance, NEFA and the Arts & Business Council will be teaming up to create 30-minute webinars on topics like insurance. As you read this blog, please comment on points that you would like further clarification on or post your insurance questions! We are eager to hear your feedback.

Chris’ Ten Public Art Insurance Points

1.  What insurance is typically needed?
Property Coverage for your materials & work:

• located at your studio
• while in transit
• while being installed
• while on exhibit

It is important to note that during the creation of your work the value of the property can change and your property policy must be built to handle this.

Liability Coverage for any bodily injury or property damage you cause to others. In addition many contracts require your liability policy to have certain clauses added such as a “Waiver of Subrogation,” “Primary and Non Contributory,” and “Additional Insured,” status for the client. Not all policies will provide these and care must be taken to make sure the carrier is willing to provide these clauses if needed. (Of note, along with these requirements, the client may require you to sign a Risk Transfer Agreement.  The Risk Transfer Agreement acts in conjunction with your policies to protect the interests of your client at your expense. Please review with your attorney before signing such an agreement.)

Non Owned and Hired Commercial Auto Coverage in case you are names in a suit involving the use of an automobile. Workers Compensation Coverage for any employees and uninsured sub-contractors you use. Coverage A is needed for each state you work in. Umbrella or Excess Coverage is often required by clients. This policy grants additional liability coverage to the General Liability, Auto and Workers Compensation policies. Policies run for twelve months.

2.  Does insurance cover the lawyer’s fee?
Yes. Along with the limit of liability you select, in most cases the costs to defend you are included for no additional charge.

3.  If you are an LLC are you protected?
When someone is injured they will look to hold the responsible party accountable. Setting up a LLC is a good idea but insurance is still needed to protect the LLC. In addition, the contracts as offered by the clients normally require such insurance. In short setting up a LLC is not a substitute for having insurance. 

4.  Glossary of insurance terms
Make sure you understand the lingo. View this comprehensive glossary of insurance terms. 

5.  Home and Auto Insurance
If you are working from home, you should obtain permission from your home insurance carrier. If you use your auto in business, you should also let carrier know this. Not disclosing when you apply for the insurance can end up costing dearly later as it may allow the carrier to not to defend you as they may claim you misrepresented the risk to them. The following are articles Chris prepared about home & auto insurance, Coverage C, and renting a vehicle: 

• Business Use of Home Auto
• Coverage C 
• Renting a Vehicle - Am I Covered

*Advice from Chris: with any insurance you get, make sure to sign every and any application. Don’t let an agent assume any facts.

6.  Indemnification, Waiver of Subrogation and Primary-Non Contributory Clauses 
These three clauses are commonly required in your contracts:

• Indemnification means you are going to protect the commissioning body from any loss costs they will have due to your acts.
• Waiver of Subrogation is a clause that disallows your insurance carrier from pursing reimbursement from your client’s carrier.  An example being Gill as an artist working with Hawthorne a building owner.  Gill’s employee is injured while working at Hawthorne’s site due to something a Hawthorne employee did.  The injured Gill employee files for workers comp.  The Waiver of Subrogation prevents Gill’s WC carrier from going after Hawthorne’s General Liability for reimbursement.  Learn more in this article, What is a Waiver of Subrogation?
• Primary-Non Contributory is a clause that states your policy will act as the primary policy to cover a loss and also disallows allows the clients policy from sharing in the loss.

7.  Insurance vs. Warranty
If you were asked to put in a pink bull and you put in a purple buffalo, then you get sued for warranty because it is the performance of your product.  Insurance is there is the product injures someone.

8.  Ownership
At the time of loss, who owned the work? If ownership has been transferred to the city, say Cincinnati, then the injured party will go to Cincinnati. If you are installing the work and someone is injured, the person will go after you. Your policy will stand and protect and defend you and settle on your behalf. 

Ten years down the road, an incident happens and you stopped carrying the insurance – what happens? If you drop the insurance, they insurance company will not help you. Insurance does not cover the work just when it was created. Every state has a different length of repose (time you can be sued). Massachusetts is 6 years. If you do not own the piece, the insurance will still protect you, if you have it. 

9.  What are the ramifications of hiring a sole proprietor?
Chris outlines the ramifications of hiring a sole proprietor in his article, Ramifications of Hiring a Sole Proprietor.

10. Remember: the insurance company is looking at you like a contractor as well as an artist.