You Said "All" Risk, Didn't You? (UPDATED 2X)
The Wall Street Journal had a story ($) today about a Federal court decision in the Northern District of Illinois holding that an "all risk" insurance policy covered the conversion by a gallery of artworks consigned to it by the policyholder. (I couldn't find a copy of the decision online or on Westlaw. UPDATE: see below.)
According to the Journal, the plaintiffs consigned 11 paintings to Chicago dealer Richard H. Love, which he then sold and kept the proceeds. Since Love was apparently judgment-proof, the plaintiffs filed a claim under their insurance policy. The insurer denied coverage, but the court held that the loss was indeed covered: "There can be no doubt that the Gallery's unauthorized sales deprived plaintiffs of their property."
The Journal hypes it as a very big deal -- the huge four-column headline screams, "This Insurance Case Could Shake Up the Art Market," and the article claims the case "may well have a ... dramatic impact on the art world ... in terms of how high-echelon paintings, sculpture, antiques and other tangible assets such as silver, jewelry and china are bought and sold in the U.S." -- but I'm not sure I see it. Won't the insurance companies simply amend their future policies to make it clear this kind of loss is not covered?
UPDATE: Terry Martin comes through again. He's posted a copy of the decision here.
UPDATE 2X: The Insurance Coverage Law Blog doesn't see what all the fuss is about either.
According to the Journal, the plaintiffs consigned 11 paintings to Chicago dealer Richard H. Love, which he then sold and kept the proceeds. Since Love was apparently judgment-proof, the plaintiffs filed a claim under their insurance policy. The insurer denied coverage, but the court held that the loss was indeed covered: "There can be no doubt that the Gallery's unauthorized sales deprived plaintiffs of their property."
The Journal hypes it as a very big deal -- the huge four-column headline screams, "This Insurance Case Could Shake Up the Art Market," and the article claims the case "may well have a ... dramatic impact on the art world ... in terms of how high-echelon paintings, sculpture, antiques and other tangible assets such as silver, jewelry and china are bought and sold in the U.S." -- but I'm not sure I see it. Won't the insurance companies simply amend their future policies to make it clear this kind of loss is not covered?
UPDATE: Terry Martin comes through again. He's posted a copy of the decision here.
UPDATE 2X: The Insurance Coverage Law Blog doesn't see what all the fuss is about either.
posted by Donn Zaretsky at 11:01 PM
<< Home