With individual works of art now routinely selling for over $50 millon as well as a rash of high profile art thefts, the issues of security and insurance are now more important than ever. Adding in the extra variable of transaction taxes which can amount to 10-15%, which is more than just an after thought on a $50 million transaction, an ideal solution would be an impregnable art vault set up in a taxfree zone. Luckily for the major holders of art, such a thing exists in the form of “free ports”, the most established being the Geneva free port which the Ecomonist states is the size of 22 football pitches and believed to hold over $10 billion in valuables. In an excellent piece in the New York Times, David Segal offers a rare glimpse into Geneva’s free port. It is believed to hold over 3 million bottles of wine and other valuables such as bars of gold and oriental rugs. It was origainally set up as a grain repository in 1888 and over the years has become a storage place for the precious objects.
Although there are other designated free ports in Zurich and one planned for Luxembourg, in recent years the combination of growing Asian wealth and the desire to have such precious objects closer to home has spurred the building of giants state of the art facilitiies in Singapore and Beijing.
However, with recent site specific tragedies such as 9/11 and Fukishima, the Economist writes that insurance companies are now taking a closer look at where the art they are insuring is being held, lest they find themselves on the hook for a modern Alexandria Library,
Many insurers no longer issue blanket coverage for a piece without knowing whether it is on display, in storage or being transported. In response a few collectors have moved their works to smaller Swiss free ports or to a massive new one next to Singapore’s Changi airport. New free ports are being built in Luxembourg and Beijing, and planning is said to be under way for one in Monaco. Art lovers are benefiting, too. Some owners have moved collections out of storage to be displayed at home or in museums.
It is a strange twist of fate where insurance companies are encouraging collectors to take their art out of the safe and put it onto the walls.