Insurance and Liability

Artist-Gallery Consignment Statutes

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Courtesy of St. Louis Volunteer Lawyers and Accountants for the Arts (VLAA) More than 30 states have statutes governing the business relationship between artists and art galleries. Most of the laws dictate that the art dealer owes a fiduciary duty to the artist, meaning that the gallery cannot take actions that are inconsistent with the artist’s financial well-being. This state-by-state summary highlights the unique provisions of the statutes. Please note that the links to the statutes are intended for informational purposes only. TEXAS V.T.C.A., Occupations Code § 2101.001 et seq. (2012). Artist-gallery relationships are not considered consignment agreements in the state of Texas; however, artwork delivered to an art dealer is not subject to the claims of creditors until artist has been paid in full . . . read more at vlaa.org.Art consignment comes with a lot of risks. Three types of laws protect consignors: the Uniform Commercial Code, state consignment laws, and written art consignment agreements.Uniform Commercial CodeThe Uniform Commercial Code (UCC) is a set of acts that tries to harmonize state laws. Many states have used the UCC to form laws that govern art consignments. The UCC states that if your artwork is damaged due to the gallery's negligence, the gallery must compensate you for your loss.One of the more common issues in the art world concerns who is financial responsible in the event the gallery goes bankrupt. The UCC provides that the gallery's creditors can seize your consigned goods to pay for the gallery's debts. All of the gallery's creditors stand in line to collect before you. If there are funds left after the creditors are paid, the judge in bankruptcy court can award you compensation for your art. If the gallery has a lot of debts or there are too many artists to compensate, you may see little or no compensation for your art. The UCC protects artists in art consignment if the artists fulfill certain requirements:File a UCC-1 form in the county where the gallery is located at the time of the art consignment. This creates a lien—a legal claim to the property—which will put you ahead in line to receive compensation in bankruptcy court. If and when your work is sold, you must remove the lien.In some states, you can have the gallery post a sign notifying the public that the works are consigned and that the crafts in the gallery are sold under the terms of consignment agreements. This may seem awkward, but galleries usually cooperate.Show that the creditors knew or had reason to know that the gallery sold consignment arts and crafts. Proving this can be difficult; so, many artists send the gallery's creditors a copy of the consignment agreement. Even this can be hard, since most artists do not know who the creditors are or even have a written consignment agreement.State Consignment LawsMany states have enacted their own art consignment laws to protect artists from creditors seizing consigned goods in the case of the gallery's bankruptcy: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Washington, and Wisconsin. Many of these states require that a written consignment agreement exists between the artist and the gallery for these protections to exist. Artists will probably need an attorney to help enforce these protections and filing claims in bankruptcy courts.Not all pieces qualify as "art" under state consignment laws. Some states define "art" as only fine art, such as a painting, sculpture, graphic art drawing, or a print, but not multiples or duplicates. Other states also include crafts in their consignment laws. Crafts are works that are made from clay, metal, glass, wood, plastic, or fiber.Written Art Consignment AgreementsUntil recently, artists have traditionally used oral consignment agreements. However, as more state laws require written consignment agreements in order to protect the artists, it is important to establish consignment agreements in writing.- See more at: http://smallbusiness.findlaw.com/intellectual-property/laws-governing-art-consignment.html#sthash.xFaIx9Yj.dpufArt consignment comes with a lot of risks. Three types of laws protect consignors: the Uniform Commercial Code, state consignment laws, and written art consignment agreements.Uniform Commercial CodeThe Uniform Commercial Code (UCC) is a set of acts that tries to harmonize state laws. Many states have used the UCC to form laws that govern art consignments. The UCC states that if your artwork is damaged due to the gallery's negligence, the gallery must compensate you for your loss.One of the more common issues in the art world concerns who is financial responsible in the event the gallery goes bankrupt. The UCC provides that the gallery's creditors can seize your consigned goods to pay for the gallery's debts. All of the gallery's creditors stand in line to collect before you. If there are funds left after the creditors are paid, the judge in bankruptcy court can award you compensation for your art. If the gallery has a lot of debts or there are too many artists to compensate, you may see little or no compensation for your art. The UCC protects artists in art consignment if the artists fulfill certain requirements:File a UCC-1 form in the county where the gallery is located at the time of the art consignment. This creates a lien—a legal claim to the property—which will put you ahead in line to receive compensation in bankruptcy court. If and when your work is sold, you must remove the lien.In some states, you can have the gallery post a sign notifying the public that the works are consigned and that the crafts in the gallery are sold under the terms of consignment agreements. This may seem awkward, but galleries usually cooperate.Show that the creditors knew or had reason to know that the gallery sold consignment arts and crafts. Proving this can be difficult; so, many artists send the gallery's creditors a copy of the consignment agreement. Even this can be hard, since most artists do not know who the creditors are or even have a written consignment agreement.State Consignment LawsMany states have enacted their own art consignment laws to protect artists from creditors seizing consigned goods in the case of the gallery's bankruptcy: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Washington, and Wisconsin. Many of these states require that a written consignment agreement exists between the artist and the gallery for these protections to exist. Artists will probably need an attorney to help enforce these protections and filing claims in bankruptcy courts.Not all pieces qualify as "art" under state consignment laws. Some states define "art" as only fine art, such as a painting, sculpture, graphic art drawing, or a print, but not multiples or duplicates. Other states also include crafts in their consignment laws. Crafts are works that are made from clay, metal, glass, wood, plastic, or fiber.Written Art Consignment AgreementsUntil recently, artists have traditionally used oral consignment agreements. However, as more state laws require written consignment agreements in order to protect the artists, it is important to establish consignment agreements in writing.- See more at: http://smallbusiness.findlaw.com/intellectual-property/laws-governing-art-consignment.html#sthash.xFaIx9Yj.dpufArt consignment comes with a lot of risks. Three types of laws protect consignors: the Uniform Commercial Code, state consignment laws, and written art consignment agreements.Uniform Commercial CodeThe Uniform Commercial Code (UCC) is a set of acts that tries to harmonize state laws. Many states have used the UCC to form laws that govern art consignments. The UCC states that if your artwork is damaged due to the gallery's negligence, the gallery must compensate you for your loss.One of the more common issues in the art world concerns who is financial responsible in the event the gallery goes bankrupt. The UCC provides that the gallery's creditors can seize your consigned goods to pay for the gallery's debts. All of the gallery's creditors stand in line to collect before you. If there are funds left after the creditors are paid, the judge in bankruptcy court can award you compensation for your art. If the gallery has a lot of debts or there are too many artists to compensate, you may see little or no compensation for your art. The UCC protects artists in art consignment if the artists fulfill certain requirements:File a UCC-1 form in the county where the gallery is located at the time of the art consignment. This creates a lien—a legal claim to the property—which will put you ahead in line to receive compensation in bankruptcy court. If and when your work is sold, you must remove the lien.In some states, you can have the gallery post a sign notifying the public that the works are consigned and that the crafts in the gallery are sold under the terms of consignment agreements. This may seem awkward, but galleries usually cooperate.Show that the creditors knew or had reason to know that the gallery sold consignment arts and crafts. Proving this can be difficult; so, many artists send the gallery's creditors a copy of the consignment agreement. Even this can be hard, since most artists do not know who the creditors are or even have a written consignment agreement.State Consignment LawsMany states have enacted their own art consignment laws to protect artists from creditors seizing consigned goods in the case of the gallery's bankruptcy: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Washington, and Wisconsin. Many of these states require that a written consignment agreement exists between the artist and the gallery for these protections to exist. Artists will probably need an attorney to help enforce these protections and filing claims in bankruptcy courts.Not all pieces qualify as "art" under state consignment laws. Some states define "art" as only fine art, such as a painting, sculpture, graphic art drawing, or a print, but not multiples or duplicates. Other states also include crafts in their consignment laws. Crafts are works that are made from clay, metal, glass, wood, plastic, or fiber.Written Art Consignment AgreementsUntil recently, artists have traditionally used oral consignment agreements. However, as more state laws require written consignment agreements in order to protect the artists, it is important to establish consignment agreements in writing.- See more at: http://smallbusiness.findlaw.com/intellectual-property/laws-governing-art-consignment.html#sthash.xFaIx9Yj.dpuf
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Arts Law: Liability and insurance

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Courtesy of Arts Law. IntroductionIt is important that you take care to avoid damage or injury to people and property when operating a business. Most creative activity occurs without incident. However, accidents do happen and sometimes you may be legally responsible for compensating someone for an injury he/she suffered. For example, a customer could slip and fall in your gallery, a volunteer may be injured while helping you cast a mold, an employee or contractor may be injured while using a piece of your equipment. A valuable artwork could be stolen from your studio. Accordingly, you should be prepared in the event of an accident by taking liability insurance.What is liability?Liability is your legal responsibility, duty, or obligation to compensate a person for the harm you have caused by breaching your legal duties to that person:Duty of Care: the law requires you to take reasonable care to avoid hurting or damaging a person or their property when your actions (or inaction) are likely to affect them.Breach of duty: if what you do (or fail to do) causes harm to a person whom you owed a duty of care, you may be legally responsible or liable.Consequences: if a court finds that you have done the wrong thing and are responsible for the harm caused, you may have to pay money to the injured person or for the damaged property. The court will look at what precautions you took to prevent harm to the person to whom you owed a duty of care. Responsibility of tenants or licenseesThe owner of a property is ultimately responsible for maintenance of the property. As a tenant or licensee occupying property, for example under a lease for an arts studio, you may still be responsible for injuries occurring on the rented or licensed premises . . . read more at artslaw.com/au
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Getting the Right Insurance Coverage

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Courtesy of Studio Protector.org On a daily basis, the CERF+ (Craft Emergency Relief Fund + Artists' Emergency Resouces) receives requests from craft artists throughout the country for information and financial assistance in the wake of emergencies that jeopardize their livelihoods. Too often, these fires, natural disasters, accidents, life-threatening illnesses, and thefts leave professional artists on the brink of ruin because they have not properly protected themselves with business insurance. CERF+ currently provides financial assistance only to craft artists, but there is no reason to believe that the same does not hold true for all artists. While there may be no way to prevent an emergency from taking a toll on your business, the damage can be minimized with appropriate business insurance. Many artists have considered business insurance but have dismissed it as either an unaffordable or a frivolous expense. But as Christina and Michael Adcock, owners of Leaves of Grass in Santa Barbara California, can attest, it is not. In 2002, they lost all of their equipment, materials, tools and inventory in a fire that consumed their studio. They were unable to work for the three months it took for their studio to be rebuilt. Fortunately, they were covered by insurance. More about Insurance:Risk ManagementHealth InsuranceHomeowners InsuranceBusiness InsuranceDisaster InsuranceFlood InsuranceInsurance ResourcesBusiness Insurance Plans 
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Business Insurance Resources for Artists

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Courtesy of Studio Protector, and Craft Emergency Relief Fund.The following organizations and companies offer business insurance to artists. We provide this as a resource only, and do not endorse products offered by any company or organization.   Contact list available at studioprotector.org
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Fractured Atlas Craft Artist Insurance

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 Craft artists who are members of Fractured Atlas can purchase annual general liability insurance at extremely competitive rates. This program offers general liability coverage for the artist year round; you can elect to cover your artwork, your equipment, and your materials as well.How Much Does it Cost?General liability policies for most craft artists have been between $350-$450 for the year. Artwork, equipment, and materials coverage is based on the total value and tends to cost anywhere from $300-600 (assuming the value is between $10K and $100K).How Long Does it Take?We try to get you a quote within 3-5 business days, though it can take longer. If you like it, you can purchase the policy instantly online. You can then request certificates as proof of coverage through our website.Submit an application and request a quote.Note: most craft artist policies are insured by The Hartford Insurance Company. Application may be submitted to other carriers as needed.
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Fractured Atlas Liability Insurance

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 Lots of people can sell you insurance, but Fractured Atlas is different. We're a non-profit organization that supports the arts and creative industries.Thanks to the combined purchasing power of the Fractured Atlas community, our members have access to high-quality coverage for much lower rates than would otherwise be possible. More importantly, with one foot in the arts and another in the world of insurance, we've worked with some of the world's leading insurance companies to design a number of proprietary insurance programs that are specially tailored to meet your specific needs. We've even made the process as quick and painless as possible.  Learn more at Fractured Atlas.org 
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Fractured Atlas Pocket Guide: Insurance for Actors and Theatre Groups

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Insurance for public art projects can be a nightmare to understand: every city and commissioning entity is likely to ask for different insurance in different ways. This guide is here to help you begin to navigate the maze of requirements that your next project may present. Topics include:  Commercial General LiabilityVolunteer AccidentWorkers' CompensationProperty CoverageGeneral Liability Insurance (Individuals)Directors and Officers InsuranceInternational TouringHealth Insurance (Individuals)Health Insurance (Small Groups)Disability Insurance Courtesy of FracturedAtlas.org
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Fractured Atlas Pocket Guide: Insurance for Musicians and Music Groups

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As a musician, insurance may not be something that you have had to consider very often. However, when the issue arises it's best to know what to look for and the most important types of coverage to consider.This guide will help you to decide what is absolutely essential, what is relatively important, and what is simply nice to have. Topics include:Commercial General LiabilityVolunteer AccidentWorkers' CompensationProperty CoverageGeneral Liability Insurance (Individuals)Instrument InsuranceInternational TouringHealth Insurance (Individuals)Health Insurance (Small Groups)Disability Insurance
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Fractured Atlas Pocket Guide: Insurance for Dancers and Dance Companies

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Your insurance needs to meet the demands of the theater as well as the demands of your budget. This guide will help you to decide what is absolutely essential, what is relatively important, and what is simply nice to have. Topics covered include: Commercial General LiabilityVolunteer AccidentWorkers' CompensationProperty CoverageGeneral Liability Insurance (Individuals)Directors and Officers InsuranceInternational TouringHealth Insurance (Individuals)Health Insurance (Small Groups)Disability Insurance    
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Title Insurance for the Arts

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Courtesy of The Economist  WHEN an associate of the Musée d'Art Moderne André-Malraux in Normandy flipped through the catalogue for the auction of impressionist art at Sotheby's in New York on November 2nd, he made a startling discovery. On sale was “Blanchisseuses souffrant des dents”(Laundry women with toothache), a painting by Edgar Degas, which had been stolen in 1973 from a museum where it had been on loan from the Louvre. After being alerted by the French authorities, Sotheby's dropped the painting from the sale.An investigation is under way. The owner was putting the painting up for sale in good faith, but he or she is likely to lose it without compensation when it is returned to France. Like most art collectors, the owner had no art-title insurance, which would have provided compensation for the painting's value, estimated by Sotheby's at $350,000-450,000.“Theft accounts for only a quarter of title disputes,” says Judith Pearson, a co-founder of ARIS, a small insurance firm that has been selling title insurance since 2006 and which was taken over by Argo Group, a bigger insurer, earlier this month. Three-quarters of squabbles occur in cases of divorce or inheritance when a spouse or other heirs challenge a seller's right to sell. A work of art may also carry liens after being used as a collateral for a loan. More rarely, two or more artists may collaborate but then disagree about who has authority to flog their co-production.Does the risk of title disputes warrant the cost of title insurance? ARIS charges a one-off premium of between 1.75% and 6% of the art's value. In return the company will cover the legal costs in case of a title dispute and compensate for the agreed value of the art if their client loses the ownership dispute. ARIS has so far written about 1,000 policies and has not yet had a claim...read more.
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