Insurance of the SLAV EPIC
The collection of twenty large-format paintings by Alfons Mucha, collectively known as the "Slav Epic," is a world-class rarity that the Czech painter created between 1912 and 1926. It is not easy to correctly determine the insurance value of a work whose value is a subject of speculation even among fine art experts. If the insurance amount were set too low, there would be a risk of the insurer reducing the indemnity in the event of damage to the exhibited works due to underinsurance. If the insurance amount were set too high, the client would be paying unnecessarily high premiums.
Insurance for the Slav Epic
The collection of twenty large-format paintings by Alfons Mucha, collectively known as the "Slav Epic," is a world-class rarity that the Czech painter created between 1912 and 1926.
The first canvases were exhibited in 1919 at the Clementinum in Prague, and the complete collection was then presented to the Czech public at the Trade Fair Palace in Prague in 1928. From 1963 to 2011, the paintings were exhibited at the castle in Moravský Krumlov. After long disputes, five of the paintings were placed in the hall of the Trade Fair Palace in Prague starting in April 2011, and the entire cycle was subsequently made accessible at the same location in May 2012. This exhibition ended in 2016.
In 2021, following a series of multi-year negotiations, the leadership of the town of Moravský Krumlov reached an agreement with the Prague City Gallery to loan the Slav Epic back to the exhibition spaces of the Moravský Krumlov castle. However, the approval of the contract was preceded by the fulfillment of various conditions set by the Prague City Gallery. In addition to requirements for structural modifications and the technological infrastructure of the exhibition spaces, the town of Moravský Krumlov also had to provide proof of adequate insurance for the exhibited work.
Preparing the insurance program
The leadership of the town of Moravský Krumlov turned to us, as the manager of all insurance for the town and its organizations, with a request for assistance in arranging insurance for the Slav Epic in accordance with the requirements of the Prague City Gallery. Given that all municipalities are public contracting authorities under the Public Procurement Act, we prepared the insurance-technical portion of the above-threshold public contract for the town, which was then tendered by the public procurement administrator. To ensure the lowest possible rate for the individual risks being insured, we conducted a risk assessment prior to the public tender itself, with the participation of insurance companies, to develop a risk report used by the underwriting departments of the individual insurers. In other words, a mapped and described risk is easier and cheaper to insure.
What is the value of a work of inestimable value?
It is not easy to correctly determine the insurance value of a work whose value is a subject of speculation even among fine art experts. If the insurance amount were set too low, there would be a risk of the insurer reducing the indemnity in the event of damage to the exhibited works due to underinsurance. If the insurance amount were set too high, the client would be paying unnecessarily high premiums. To eliminate both of these problems, the Slav Epic was insured on a so-called first-loss limit. A first-loss limit does not address the adequacy of the insurance amount, but rather states that within the scope of the insured risks, the insurer will cover damages up to a maximum of the agreed first-loss limit.
Which insurance company can insure unique works of art?
Defining the risk along with the maximum possible loss was an unsolvable problem for many insurance companies, which is why we began negotiations with the reinsurance market, to help insurers secure reinsurance capacity. Reinsurers are, simply put, insurers for insurance companies, helping them cover potential losses for which the insurers themselves would not have sufficient funds to meet their obligations. After we secured reinsurance capacity for local insurers on the international reinsurance market, it became possible for them to participate in the public tender for the insurance of the Slav Epic.
Do you have a complex insurance problem? We would be happy to help you with it too. Contact us – We are Eurovalley, an insurance company with over 30 years of experience.
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