Insuring Ephemeral Art

The Other Insurance Debate: Fine Art Expert Brian Shannon discusses how to put a price tag on DVDs, decaying sharks

Article by Jenette Sturges

This article is based on an old audio interview. But learn why it’s key to the magazine.  [DDET (click to expand)]
The original interview was on
Bad at Sports before I knew how to edit audio, so Brian Shannon sounds exactly like Max Hedroom, and the original audio files are gone.   So we “articleized it” below, and are still working with the key ideas presented.

It deals with the radical idea that the value is the value. Fine art insurers will insure a rotting orange that has turned to dust for 10 million dollars if the market supports the premise that it’s really worth 10 million. If the artists intention is that the orange, now dust, IS the piece, then goddamn it, it’s the piece. If the artist says it should be replaced every month with a new orange, then that’s the piece. It’s all about the artists intent. Which brings up the thesis I’m fascinated with and is the core of this magazine: when an artist makes these contractual decisions, then we know the true artistic intent. Is the point this particular orange, or the process of watching decay? That’s the question, and the only one who can speak to that answer is the artist (or their estate post-mortem). So it’s crucial that we start asking artists these questions while they are alive so we know what to do with their art in 200 years.

If a Warhol falls in the woods, and no one is around to bid on it, does the insurance company still pay out $30 million?

The answer is largely up to this man, Fine Art Expert Brian Shannon, of the AXA Art Insurance Corporation, who explains his work in valuations like this:

“Say a private collector has a Warhol painting, the last one of which has been sold at auction for say $20 million. The appraisal comes in and it is for $30 mil. It’s my job to determine whether or not the market actually will sustain a $30 million Warhol painting.”

This can depend on a number of traditional factors, like the condition of the piece, but in a changing art world, two factors are making Shannon’s job a little trickier: ephemeral art and the era of digital.

In the case of Warhol’s slap-dash nature, some degradation in the condition of a painting is expected and excused in appraisals. But what about pieces that are meant to fall apart? Ephemeral art, photographs that have been intentionally designed to fade or rot over a relatively short period of time, for instance, makes valuating works in flux difficult.

“Quite simply, if the work was made to fade or rot, that’s part of the process of the piece, so as a collector, you have to be aware of that. That’s your choice of the piece, and you shouldn’t buy a photograph that’s meant to fade and not know it’s meant to fade.”

When looking at these hard-to-insure pieces, Shannon said, it’s that process or the idea of the piece that becomes more important.

“There’s an artist who produces work and puts the diagrams on the Internet for people so you can basically access his work through that. It doesn’t really exist in a physical form unless you can recreate it. Insuring something like that would be very difficult. Putting a value on it, if you paid $10,000 for the idea and that idea is yours, then yes, there you go, there’s your value.”

Then there’s the problem of Damien Hirst’s preserved animal sculptures.

“It’s no secret,” Shannon explains, “The shark in a tank, The Physical Impossibility of Death in The Mind of Someone Living, is falling apart, it’s rotting, it needs to be replaced. The artist’s intent is, “Fine, replace it. The idea is more important than the shark.’ So you replace the shark and it becomes a new piece.

“If you look at it from an insurance standpoint, if that shark is damaged and it’s worth the $12 million that the newspapers say the particular collector paid for it, is the insurance company going to pay the $12 million, or is the insurance company going to pay a couple of college kids to go out and wrestle up a shark and stick it in a tank of formaldehyde? The difference is the value on the market of a finished piece, the physical piece, and the value to replace the piece based on its reproduction costs.”

So what’s the answer there?

“There is no answer yet,” Shannon said. But he said it would likely be played out in a claim negotiation.

And the shark raises another issue: defining the piece that is more than the sum of its parts.

“When they travel, the solid parts of the animal are removed from the tank and stored in big Ziploc bags and put on ice. The formaldehyde is drained. The aquarium case is dismantled. At that point in time, technically, the piece does not exist. So say the truck carrying these pieces and parts tips over and catches on fire and everything’s destroyed, is there really a claim for a piece?”

Decaying sharks aside, art in the digital age presents its own set of valuation and insurance issues, though ones more readily answered.

Collectors in VHS- and Beta-era video art are increasingly copying originals to DVD, preserving original analog tapes in climate-controlled storage to archive and secure the work. But what about the artist that works in digital, creating a piece that is capable of being perfectly reproduced? Is an original DVD itself worth something, or is it just data?

Shannon admits to skirting the issue a bit, but insists the original, from an insurance standpoint, anyway, is something more.

“The original DVD in a way still has some original quality to it. The artist made it. They’re usually only in a series of say six, eight, 15, so each piece to the edition has passed through the hands of the artist. The artist usually signs the DVD, there’s usually a certificate of authenticity, so a copy is in fact just a copy, even if it is an exact replication from a DVD to another DVD.”

With all these questions circulating on the worth of art in an age of ephemeral work and digital chaos, what final bit of advice does Shannon have on investing in the art world?

“Collect what you like. Don’t do it for investment purposes – you’ll always be disappointed. Just do it for pleasure. Do it with what’s in your budget.”

And of course, insure it.