Physical prevention and insurance cover against climate risk

Climate change is also having an increasingly tangible impact on the art market. Extreme weather events such as floods, fires and hurricanes pose a real threat to the preservation of works. In the private sector, in order to protect their investments, collectors are taking increasingly articulated measures combining physical prevention and insurance coverage. A first line of defence consists in moving works to safer locations. Many collectors are resorting to storage facilities offering high security standards: underground storage, advanced HVAC systems, humidity control and business continuity even in case of blackouts. At the same time, the focus on in situ protection is growing: in private homes, shockproof glass is installed in rooms housing fragile works, while outdoor sculptures are temporarily moved indoors in case of bad weather. The use of back-up generators and the planning of evacuations with predefined routes and access complete the strategies.

Alongside physical protection, insurance is an essential form of risk mitigation. All-risk' policies cover all damage that is not expressly excluded, whether for items stored in fixed locations or in transit. These are complemented by policies for the home or personal property, which require a specific and detailed valuation for more valuable assets. In the exhibition context, on the other hand, wall-to-wall policies protect works of art from the moment they are picked up until their return, including transport and the exhibition period.

Museums and galleries can also take out event cancellation cover, which is useful in case of cancellations due to extreme weather events. Collectors can be included in these policies as additional insureds. Coverages include, as appropriate, general liability, professional liability for conservators and curators, and directors and officers for negligence or breach of fiduciary duty.

In recent years, three factors have contributed to the rise in art insurance premiums: the increase in the value of works, the growth of climate-related risks and the increased demand for cover. At the same time, many companies are limiting the scope of policies: deductibles of up to 5-10% of the insured value are being introduced, especially in high-risk areas, and exclusions for fire, flood or earthquake damage are being increased. Finally, some companies are refusing new cover for properties located in particularly exposed regions, such as California and Florida. During the January 2025 fire in California, the Getty Villa in Los Angeles was able to protect its collection thanks to robust emergency protocols and careful architectural design. The high risk of natural disasters in the Los Angeles area prompted its museums to develop advanced fire, earthquake and smoke protection systems. The Getty Center and the Getty Villa, built with fireproof materials and equipped with firefighting tanks and systems, avoided damage despite the proximity of flames. Other museums such as the Norton Simon Museum have also strengthened their filter systems to protect works from toxic smoke. On the earthquake front, new buildings such as the Lucas Museum and LACMA's David Geffen Galleries are equipped with earthquake isolators, while at the Getty every work is fixed to withstand the tremors.

In Italy, the Budget Law 2024 (Article 1, paragraphs 101-111) introduced an insurance obligation for companies, including those active in the art market, aimed at protecting property, plant and machinery from damage caused by calamitous events such as earthquakes, floods, landslides and floods. The initial deadline for taking out the policies was extended by Decree-Law No. 39/2025: medium-sized enterprises will have to comply by 1 October 2025, while small and micro enterprises will have until 1 January 2026. At the same time, there is growing interest in parametric policies, innovative insurance instruments that are automatically activated when predefined conditions occur (such as exceeding specific rain or wind thresholds) without the need for a post-event damage assessment. These mechanisms simplify and speed up compensation.