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The Flap Over Scrap: Theft and Vandalism in Exterior Sculptures

The rise in the value of metal prices is accelerating loss trends for public sculptures.

November 22, 2011 Photo
Every morning on their way to the Notting Hill tube, many run into (sometimes literally) Nadim Karam's "Carnival Elephant," a metal elephant that idly evokes the movement of people around it with its gently revolving fan, spinning in unison with the whirlwind of activity at the Newcombe Piazza. One week, however, the fan was not moving: Some rascal had indiscriminately broken off one of the blades. The stasis caused many to wonder how and when the watchful elephant would be repaired, following the unholy act of animal cruelty visited upon it.

At the Art Loss Register (ALR), contemporary sculpture damage and theft reports have been rising for years, often in correlation with the increased value of the raw materials involved. In recent times, copper alone has seen an exponential rise in price, trading at over $8,500 per ton in August of this year, with gold, brass and lead also seeing increases of almost 20% in 2011 alone. It seems that, during each economic downturn, thieves target increasingly more ignoble sources of quick cash, with public sculpture, cemeteries and even church roofs bearing the brunt of their greed.

Curators at a sculpture park in Holland have taken measures to secure public works of sculpture with modern technological resources, such as alarm systems and GPS tracking devices. But, once a sculpture is stolen, the first source of information may be scrap metal dealerships. Melissa Merz, of the Institute of Scrap and Recycling Industries in Washington, D.C., says her association strongly encourages reporting of all thefts using the group's ScrapTheftAlert system "so scrap recyclers can be on the lookout for the statue and/or any parts of it."

She says that criminals have been targeting heavier objects in "increasingly more brazen operations." Back in 2005, the two-ton Henry Moore sculpture was stolen from the eponymous foundation and was reportedly sold for scrap.

The role of damage appraisal firms, and the conclusions they draw, are becoming increasingly prominent in influencing the risks insurance companies are prepared to take. A damage appraisal is a report prepared by a qualified appraiser that specifies the value of the artwork before damage, the current value in damaged condition and, where appropriate, the value after restoration. In some cases, these reports are issued for works that are total losses due to destruction or theft, and in other cases the reports are prepared for items that are partially damaged.

Typically, the appraiser will examine the damaged object and note its condition at the time of inspection. Most often, the appraiser is instructed to use either retail replacement value (the estimated cost to replace the item with a comparable piece in the primary market) or fair market value (comparable to the estimated cost to replace the work in the secondary market), says Elizabeth von Habsburg of the Winston Art Group. The appraiser, she says, will also consider the previous auction and retail sales records for similar works, determining whether previous works by this artist or maker were sold in damaged condition and, if so, the effect of that damage on the sale price.

Further considerations include the current desirability of the artist or maker, the sale prices of works in the relevant medium, and the severity of the damage.
Typically, either the owner of the damaged piece or the broker, adjuster or underwriter will ask for an assessment and valuation of the work. Normally, these reports are requested in order to determine the loss-of-value payment due to the owner. On occasion, however, the owner or the insurer requests this report solely in order to determine the saleability of the work in damaged condition.

Artworks showcased in public places seem to be more at risk to vandalism and theft than those privately held. Underwriters are always concerned about this exposure and want to see that such works are secure in order to minimize theft, says Steven Pincus, managing director at DeWitt Stern, a fine art insurance brokerage and risk management firm.

If a work is damaged or stolen, there are many factors that have a bearing on the final outcome. For instance, Pincus says, "Is the artist alive or dead? Is there a foundation that has a say in the conservation process? Can the artist remake the piece? These are factors that underwriters may have to deal with in the loss settlement process."

Niche Specialist Coordination
Art insurers and fine art specialists work together before the claim, as well, talking about risk management from the application for insurance onward. In order to strengthen the insurance policies issued on works in the public realm, many carriers choose to be involved, often directly, from the very beginning of the work's commission.

Even when planning and commissioning a piece of art are done apart from the insurance company, the carrier will measure the risk and demand adherence to security and safety requirements. Axa Art Insurance, for example, emphasizes prudent risk management that includes thorough research by the underwriter on both the venue and the type of work displayed, according to Colin Quinn, director of underwriting. "If the location of the work is considered a high crime area or the sculpture is not protected by a pedestal or landscaping, we would discuss the possibility of moving the work to a safer location." Quinn sees Axa's role as being "an unobtrusive risk manager."

The insurance application process figures prominently in the risk management and claim scenario. The application asks a number of questions relating to security, including prior losses. Follow-through by the insured on security maintenance is critical since it's part of the representation of risk made on the application.

As far as instructing loss adjusters to contact local scrap yards and metal dealerships to locate and recover stolen work, Axa works with local law enforcement, who will provide the name and contact information for scrap dealers and foundries, says Quinn. "We will provide them with a detailed description of the sculpture and request they contact us with any relevant information. If we receive credible evidence from our sources, we will work with law enforcement to recover the item. The key is communication."
What's in Store?
The rising price of raw materials used in sculpture could very well affect the cost of creating some pieces, but—if underwriting keeps up with their duties—there shouldn't be any discrepancy between policy limits and the artwork's value. In vandalism cases, though, it could be difficult to match the metal precisely, so those kinds of costs would have to be factored in.

Axa's Quinn says the insurer turns first to the artist and/or studio. "Fortunately, we have had great success in gaining the cooperation of the artist to restore damaged artwork; this ensures the work is restored to its original intent. This approach allows the artist to maintain artistic control of the work, and the artwork can continue to be exhibited. All parties involved are satisfied with the results."

The demand for high-value raw materials will only increase with greater consumption in the eastern markets, driving up the price of metals such as gold and copper, the cost of which continues to rise at a staggering rate. Communication between industries is the key to overcoming those issues threatening the continuation of public commissions and public display.
Christopher A. Marinello is the executive director and general counsel of the Art Loss Register in London. chris.marinello@artloss.com. Jerome Hasler is a student of the Courtauld Institute of Art, London, and intern with the Art Loss Register. jerome.hasler@courtauld.ac.uk
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