How the Basquiat Forgeries Shed Light on Art and Insurance
The art world is buzzing with news of an ongoing $19.7 million legal battle involving Liberty Mutual Insurance Company, Great American Insurance Company, and the owners of a collection of fake Jean-Michel Basquiat artworks. While it may sound like a story for wealthy collectors and fancy museums, it also holds valuable lessons for everyday homeowners who own—or hope to own—art.
The case began when the FBI seized 25 works claimed to be by Basquiat from the Orlando Museum of Art (OMA) in 2022. The works were part of the “Heroes & Monsters” exhibition, but doubts about their authenticity led to their removal and sparked lawsuits involving the museum, the art’s owners, and now the insurers. This case brings up an important question homeowners should ask themselves about their own art or collectibles—are they properly insured?
Are Your Valuables REALLY Covered?
Like the Basquiat Venice Collection Group (BVCG), the owners of the forged artworks, many people assume their valuable possessions are automatically covered by their homeowners’ insurance policy. However, this isn’t always the case. Standard homeowners’ policies typically have strict limits on specialty items like art, jewelry, or antiques. If you haven’t explicitly scheduled these items on your policy with appraisals to back up their value, you may end up devastated in the event of damage, loss, or theft.
Most insurance companies require you to “schedule” high-value items, meaning you need to list them individually. This involves providing documentation of their worth, such as appraisals or purchase receipts. It’s the kind of due diligence that the insurers in the Basquiat case argue was skipped when the allegedly fake works were added to the museum’s loan policy. The argument from Liberty Mutual and Great American Insurance boils down to this: valuable art can’t just be assumed to have value—they need proof, especially in the form of appraisals.
Why Appraisals Matter
Think about this. You’ve inherited an old painting from a relative. It’s been in the family for decades, and while you have no idea if it’s worth $100 or $100,000, you hang it on the wall. A friend casually remarks it looks like it’s from a well-known artist. Intriguing, right? But unless you’ve had the painting appraised and its value documented in a way that your insurer accepts, it may not be fully covered under your existing coverage.
This is exactly where things can go wrong. The nail-biting Basquiat case underscores the risks of misrepresenting or misunderstanding art valuations. Insurers in this case are pointing out that forgeries don’t count as “covered property” because they’re considered virtually valueless. It’s an uncomfortable thought for any homeowner who hasn’t done the work of verifying the provenance of their art.
Actionable Advice for Homeowners
The Basquiat case is a reminder for all of us—not just the ultra-rich—to review our insurance policies carefully and think about how we’re protecting our valuables. Here are some practical tips if you own art or collectibles:
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Get an Expert Appraisal
How can you know what your cherished art is worth unless an expert tells you? Professional appraisers can provide you with a detailed written valuation of your pieces. This isn’t just helpful for insurance; it’s also crucial for resale, donations, or even estate planning. -
Talk to Your Insurance Agent
Trust us, your insurance agent has heard it all before, and they’re there to help. Bring up your art or any valuable items during policy reviews. Ask whether they’re included under standard coverage or if they need to be listed separately. -
Request a Personal Articles Policy
Many insurance companies offer personal articles policies separate from standard homeowners’ insurance. These provide tailored coverage for valuable items and protect against a broader range of risks, including accidental damage. -
Update Regularly
Art doesn’t stand still in terms of value. Getting a new appraisal every few years ensures you’re not under- or over-insuring your collection. Insurers also appreciate this diligence and may even require it for scheduled items. -
Verify Provenance and Authenticity
If you’re making a big purchase or have inherited art, do your homework. Fake artworks like those in the Basquiat case aren’t just a headache for insurers; they’re financial landmines for owners. Consider keeping transaction records, certificates of authenticity, and other documentation organized.
Moving Forward
For the Orlando Museum of Art, the road ahead is steep. Recovering funds from the insurance companies will be a challenge if the courts side with the insurers’ interpretation of policy coverage. For now, the case serves as a spotlight on the art world’s vulnerabilities—to forgeries, inadequate diligence, and gaps in insurance planning.
Art is often seen as timeless, but the risks associated with it certainly aren’t. Whether you’re an institution managing a gallery or a homeowner with a prized piece on display, the reality is clear: verify its authenticity, ensure it’s properly insured, and always be prepared for the unexpected.