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When Superstorm Sandy struck the Atlantic Coast in October  2012, one area hit particularly hard was the trendy Manhattan neighborhood of Chelsea, known for its high-end art galleries. Many galleries were inundated with up to eight feet of water—dirty water, to boot—and hundreds of works of art were damaged or destroyed.

“It was a domino effect,” says Ellen Ross, managing director of the Fine Arts Niche, for Arthur J. Gallagher in New York. “There was damaged and what was not, what was a total loss and what was not, and get things moved to the proper restorer. Plus, there was a limited number of restorers.

“In this horrific situation, with hundreds of works of art and multiple insureds and limited restorers, you just had to get in line. You had to be patient.”

Randy Hobbs, head of specialty claims for XL Group, says figuring out how to handle those art gallery claims posed a significant challenge for XL and is a good example of how complex specialty coverage has become in recent years.

“It was not just a question of being able to replace paintings,” Hobbs says. “Our fine arts claims person had to deal with all sorts of contract issues, too. We had many galleries where the works were not owned by the galleries but rather were owned by the artist and were at the gallery on consignment.” Finding the proper restorer to handle the recovery effort was another challenge, Hobbs says.

Read the full article here ____________________Reprinted with permission from Leaders Edge Magazine

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Global Asset Protection Services, LLC, and its affiliates (“AXA XL Risk Consulting”) provides risk assessment reports and other loss prevention services, as requested. This document shall not be construed as indicating the existence or availability under any policy of coverage for any particular type of loss or damage. AXA XL Risk. We specifically disclaim any warranty or representation that compliance with any advice or recommendation in any publication will make a facility or operation safe or healthful, or put it in compliance with any standard, code, law, rule or regulation. Save where expressly agreed in writing, AXA XL Risk Consulting and its related and affiliated companies disclaim all liability for loss or damage suffered by any party arising out of or in connection with this publication, including indirect or consequential loss or damage, howsoever arising. Any party who chooses to rely in any way on the contents of this document does so at their own risk.

US- and Canada-Issued Insurance Policies

In the US, the AXA XL insurance companies are: AXA Insurance Company, Catlin Insurance Company, Inc., Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Specialty Insurance Company and T.H.E. Insurance Company. In Canada, coverages are underwritten by XL Specialty Insurance Company - Canadian Branch and AXA Insurance Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA XL.
US domiciled insurance policies can be written by the following AXA XL surplus lines insurers: XL Catlin Insurance Company UK Limited, Syndicates managed by Catlin Underwriting Agencies Limited and Indian Harbor Insurance Company. Enquires from US residents should be directed to a local insurance agent or broker permitted to write business in the relevant state.