1. Forms
2. IH
3. IH-00-87

What the form is

The IH 00 87 Fine Arts Museums Coverage Form is an insurance policy form developed by the Insurance Services Office (ISO) that provides specialized coverage for fine art objects. Its primary purpose is to insure against direct physical loss or damage to fine art owned by a museum or in the museum's care, custody, or control. This includes items such as antiques, etchings, drawings, tapestries, sculptures, porcelains, china, and marble. The form outlines what property is covered, additional covered property, property not covered, covered causes of loss, exclusions, limits of insurance, deductibles, and other conditions.

Classes of business it applies to

This coverage form is specifically designed for and applies to museums. It is not suitable for fine arts dealers, galleries, or other non-dealer commercial entities that may handle fine art. Real-world examples include:

• A university art museum needing coverage for its permanent collection and loaned exhibitions.
• A historical society museum with valuable artifacts and documents.
• A specialized museum, such as a sculpture garden or a museum of photography, requiring coverage for its unique collection.

Special considerations

Several important considerations apply when using this form:

• Policy Construction: The Fine Arts Museums Coverage typically requires a combination of forms to create a complete policy. These include Common Policy Declarations (e.g., IL DS 00), Common Policy Conditions (e.g., IL 00 17), Commercial Inland Marine Declarations (e.g., CM DS 02), Commercial Inland Marine Conditions (e.g., CM 00 01), and the Fine Arts Museums Declarations (IH DS 87).
• Valuation: The method of valuing the fine art (e.g., agreed value, actual cash value, market value) is a critical aspect that needs to be clearly defined in the policy, often in the declarations or by endorsement.
• Transit and Off-Premises Coverage: The form addresses coverage for property at the museum's premises, at unnamed premises (property off the premises at others' premises), and property in transit, each with potentially different limits.
• Exclusions: The form contains specific exclusions, such as for contraband or property illegally traded. There are also typical exclusions like wear and tear, gradual deterioration, and damage caused by insects or vermin unless specifically endorsed.
• Packing and Record Keeping: The named insured usually agrees to have competent packers handle the covered property and is required to maintain accurate records for a specified period.

Key information for agents and underwriters

Agents and underwriters should pay close attention to the following:

• Risk Assessment: A thorough assessment of the museum's security measures (both physical and electronic), fire protection systems, environmental controls (temperature and humidity), and disaster preparedness plans is crucial. The location of the museum and its susceptibility to natural disasters (flood, earthquake) should also be evaluated.
• Limits of Insurance: Determining appropriate limits is vital. This involves understanding the total value of the museum's collection, the maximum value at any single location (including transit and temporary exhibitions), and any concentration of values. The form allows for different limits at specified premises and unnamed locations.
• Underwriting Considerations: Factors such as the museum's financial stability, claims history, expertise of its staff (curators, conservators), and loan agreement protocols are important underwriting considerations.
• Coverage Gaps: Agents should identify potential coverage gaps. For instance, while the form covers direct physical loss, specific perils like terrorism, earthquake, or flood might require separate endorsements or policies depending on the base form's exclusions and the museum's location and exposures. Endorsements like IH 99 17 (Earthquake Exclusion) and IH 99 18 (Water Exclusion) may be relevant.
• Deductibles: The choice of deductible will impact the premium and the museum's retention of risk.