By Peyton Rameas
The United States has a rich art history that deserves preserving. Early Americans understood and respected this sentiment; for example, despite the imminent danger of British soldiers burning the District of Columbia, Dolley Madison, President James Madison’s wife, prioritized saving a full-length portrait of George Washington when evacuating from the White House.[1] While physical preservation is ideal for preserving masterpieces, modern Americans tend to also insure pieces of fine art.[2] By procuring a fine art insurance policy, owners or custodians of fine art can protect their financial investments from a variety of uncertain risks.[3]
Fine art policies are generally more expansive than other types of insurance because there are unique risks associated with possessing fine art.[4] These policies are “all-risks” policies rather than named peril policies, and therefore, cover any damage that is not explicitly excluded under the language of the policy.[5] Common exclusions in fine art policies include “wear and tear, gradual deterioration, moths, vermin, inherent vice, damage due to any repair, restoration, or retouching process, mail shipments unless by registered first-class mail, war risk, and loss by nuclear radiation or radioactive contamination.”[6] Despite these exclusions, fine art policies generally cover accidental damage, theft, and damage caused by most natural disasters.[7] The dichotomy between the inclusions and exclusions aim to incentivize policyholders to take appropriately care of the pieces without punishing policyholders for uncontrollable accidents.[8]
Despite the inclusive nature of an all-risk policy, legal disputes occur when fine art insurers deny coverage, leading insurers and policyholders to argue over ambiguities in the granting or excluding language.[9] AGP Holdings Two LLC. v. Certain Underwriters at Lloyd’s of London is a more recent example of a fine art insurance dispute.[10] In that case, Ron Perelman, the controlling owner of the plaintiff-LLC, claimed that five pieces of artwork that he owned were damaged in a house fire.[11] This collection included paintings by Andy Warhol, Ed Ruschas, and Cy Twombly.[12] Despite the artwork surviving the fire and only experiencing a loss in lust, depth, definition, and character, Perelman requested $410 million to fully compensate for the loss of these pieces.[13] In response, the defendant-insurers denied the claim and argued that the damage predated the fire, constituting the damage as general wear and tear that is excluded under the policy.[14] Therefore, the argument in this case is whether the damage was caused by an included or excluded risk.[15]
Peyton Rameas is a third-year student in Vanderbilt Law School’s Ph.D. Program in Law and Economics.
[1] Summer 1814: Dolley Madison Saves Washington’s Portrait, With Some Help, Nat’l Park Serv. (Aug. 15, 2017), https://www.nps.gov/articles/dolley-madison-washingtons-portrait.htm.
[2] See John B. Lawton, Insuring Works of Art, in Museum, Archive, & Libr. Sec. 49, 49 (1983).
[3] See id.
[4] See Christiane Fischer & Jill Arnold, Insurance and the Art Market, in Fine Art & High Fin.: Expert Advice on the Econs. of Ownership 197, 203 (2010).
[5] See id.
[6] Lawton, supra note 2, at 50.
[7] Luke Pavia, Simon Grima, Inna Romanova & Jonathan V. Spiteri, Fine Art Insurance Policies and Risk Perceptions: The Case of Malta, 14 J. Risk 7 Fin. Mgmt. 66, 69 (2021).
[8] See Fischer & Arnold, supra note 4, at 203.
[9] See e.g., Chris Dolmetsch & Tom Maloney, Ron Perelman’s Fight Over $410 Million in Art Insurance Goes to Trial, Ins. J. (June 3, 2025), https://www.insurancejournal.com/news/national/2025/06/03/826029.htm.
[10] See id.
[11] See Carlie Porterfield, Billionaire Ron Perelman Claims $410 Million in Damage to Art Collection After Hamptons House Fire — But Insurance Companies Disagree, Forbes (Oct. 26, 2022, at 17:03 ET), https://www.forbes.com/sites/carlieporterfield/2022/10/26/billionaire-ron-perelman-claims-410-million-in-damage-to-art-collection-after-hamptons-house-fire—but-insurance-companies-disagree/.
[12] Id.
[13] Id.
[14] See id.
[15] See id.