Kate Taylor has a story in tomorrow's New York Sun on art title insurance, which at the moment is still being offered by just one company, ARIS. She slots me in as a "skeptic":
"Of course, there are skeptics. The author of the Art Law Blog, Donn Zaretsky, said in an e-mail that he would be concerned about what he called the adverse selection problem — namely, that 'the people who buy the coverage are more likely to be people who have a reason to be concerned about possible defects in title (and may in fact be acting on information they have but the insurer does not).'"
The fundamental weirdness of art title insurance is that, normally, we think of insurance as covering the risk of something happening in the future (death, injury, illness, earthquake, hurricane, fire, etc.), but in this case it's covering something that's already happened, i.e., a break in the chain of title. Offhand, I can't think of any other backward-looking insurance product, but maybe I'm overlooking something.
