Knowing Your Business: Value of protecting personal and professional investments

Protecting one’s investment is a practical move regardless if the investment is a personal collection, small or large inventory pegged for resale or the components of an antiques show.

When it comes to establishing protective policies for collectors, dealers, show managers and the like, the Antiques & Collectibles Insurance Group of the Antiques & Collectibles National Association (ACNA) brings forth 25 years of experience.

Established by Jim & Yvonne Tucker in 1991, the ACNA continues the mission set forth by this antique dealing couple. Recently, Antique Trader caught up with ACNA President Angie Becker to learn a bit more about the business of insurance.

Antique Trader:In what ways has the business of insurance for collectors and dealers changed since ACNA was founded?

ACNA: Collectors have become more knowledgeable about their individual collections and their values. The Internet has so many resources from past auctions to pricing guides. There are times though that the collector thinks their items are worth more than they actually are.

Dealers are more knowledgeable about the items they are selling. They have more resources to research unknown pieces, i.e. markings. Most dealers are realizing they are an actual business and need to have insurance in place in the event an occurrence happens.

AT:How many members does ACNA currently have, and how many clients have coverage through ACNA?

ACNA: ACNA currently has over 3,000 members.

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AT:Can you share a few case scenarios you’ve encountered regarding losses or examples where perhaps people had coverage, but not enough? How do you know how much and what is the best type of coverage for you and or your business?

ACNA: A fire occurred at an art gallery and burned the building to the ground. The insured only had part of their inventory insured. Therefore, they “self insured” part of the loss, which unfortunately caused them to go out of business since they were underinsured.

In another incident, a sudden windstorm came up at an outdoor show. The dealer’s booth was under a canopy tent. The wind ripped up the tent and merchandise was blown all over the ground. On the way to the show the dealer made several stops and purchased additional inventory. After the storm, they realized they didn’t have enough coverage for the inventory that was damaged. They “self insured” a part of their loss since they hadn’t increased their coverage limits after their buying trip.

As a business owner, liability should always be on your mind. If a third party gets injured and should serve you with lawsuit papers, you never know what their demands will be, especially if they are being represented by an attorney. Our liability policies have a minimum $1,000,000 limit. A dealer knows how much inventory they have, therefore if a total loss occurs, you would know what your total loss would be to “self insure.” In order to determine what limit of inventory cover you should have, you will need to look at your total inventory cost. Some dealers will obtain insurance for 100 percent of the inventory and others will only insure a portion. However, if you don’t insure 100 percent, you could be underinsured.

AT:In terms of coverage for dealers, you offer nine different types, based on the type of business you operate. Is there one type of coverage that is seeing more interest than others? Is the dishonesty bond (protection against theft by employees) a popular choice?

ACNA: The dealer type that we are seeing the largest increase has been – Estate Sale dealers. As more baby boomers are retiring, they are looking to downsize and/or liquidate their antiques and collectibles. Dishonesty Bonds are mostly obtained by Estate Sale dealers.

AT:What questions should collectors ask of themselves and of potential insurers? It appears you provide coverage for various types of antiques and collectibles, except jewelry, coins and currency and new firearms. Why is that, and what recommendation would you offer a collector interested in this type of coverage? Plus, in terms of coverage for classic vehicles, do you partner with Hagerty Classic Car Insurance?

ACNA: Collectors need to ask themselves, “How much do I have invested in my collection? What would I do if I had a total loss? Could I replace my collection? Are you financially able to purchase the items again?”

When researching an insurance carrier, you want to find out what the carrier’s rating is. All three of our companies are A-rated. Is the carrier you are researching familiar with antiques and collectibles? There are many insurance carriers in the market, but not all are familiar with this industry and how to value them. Since this has been our specialty for the past 25 years – and we were founded by collectors – we know the industry and so do our carriers. As for jewelry, coins and new firearms, we can obtain coverage for these, but not at the regular published Collector rates. These items also require a specific application which can be obtained by calling our office. Antique/Collectible/Muscle Cars – we write these with Hagerty Insurance and also Grundy Insurance.

AT:How frequently should collectors and dealers have a reevaluation done of their collections or inventory?

ACNA: We recommend collectors review their inventory at least once a year, unless there are significant value changes with their collections. Dealers should be updating their inventory at least every month, or if they are a show dealer, after each show would be best.