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gallery insurance question

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Dick Ditore
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gallery insurance question

Postby Dick Ditore » Tue Sep 09, 2003 9:06 pm

Hey, does anybody out there deal with a gallery on consignment who does not insure the artists work while in the gallery? If so, do you self insure, and if so where and what type. If the gallery does not, do you try to up the percentage in your favor to cover the insurance, fly without, or walk away. Seems every day is bringing a new thing to learn about.


Thanks,

Dick

Kitty
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Postby Kitty » Tue Sep 09, 2003 9:16 pm

they should pay for damaged goods. that's part of their half of the contract. you put up the goods, they put up the display space and take care of the merchandise. it goes into your agreement.

as far as i know, there isn't insurance for this kind of damage and loss. the annual premium would be too high to warrant covering mishaps. however, a loss might be covered by your homeowner's policy, which is possible if your art work is your "hobby" as opposed to your formal business. if it's your business, then i think that wouldnt fly. those homeowner's policies often cover things we never think of, so you might ask your agent about it.

even so, it's the gallery's responsibility to take care of your stuff while it's in their possession.

Geri Comstock
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Postby Geri Comstock » Tue Sep 09, 2003 9:18 pm

I did that in the past with mixed results...LOL. I was in one wonderful gallery for 5 years. In all that time they had minimum theft and only two pieces were broken. I ate the cost because they sold enough work that a little breakage and theft was was worth it for me.

Early in my fusing career I made the mistake of putting my work in a co-op gallery that didn't have insurance and wouldn't permit members to reimburse other members for work they broke. I was there for 5 months. In that time, 5 pieces of my work were broken by other members of the co-op and I was not reimbursed.

After the 4th piece was broken, I told the president that I'd be leaving, even though I signed a one year contract to keep my work there, if the breakage without any kind of reimbursement continued. The next month, yet another member of the co-op managed to break one of my pieces by dropping a painting on it. The breaker wanted to pay me wholesale for the piece, but the board wouldn't allow her to. I decided they were breaking more work than they were selling and not treating me and my work with adequate respect, so I resigned from the gallery by letter. It was a very nice letter, by the way. Several members called and told me what a lovely letter it was and how sorry they were that all of this had happened. Most of them didn't know and they were very nice people. Just a few of them were klutzy with glass. LOL.

After they received my resignation letter, the Gallery Treasurer called me on the phone and threatened to sue me for breach of contract. I told her to go ahead and do it because when I explained my reason to the judge, he'd rule in my favor. They didn't sue and that breakage nightmare has been over for about 9 years now. LOL. Never again!

Geri

Patricia O'Neill
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Postby Patricia O'Neill » Wed Sep 10, 2003 9:29 am

A professional and honnest gallery should take responsability of the work they take on consignment. It must be stated in the contract or consignment aggreement.
A while ago, I learned that some states have statutes to protect the artist. Some don't. For examples, Arizona has such statutes and they are very clear about the responsabily of a gallery taking art work in consignment. I would bet that California has the same. If you need, let mw know and I'll find the link for you.
If a gallery refuses to insure your work, not only they are not correct in business but they most likely break the law.

That's your call.... However, since you asked what we would do.... personally, I would not want to work with this place. I'll thank them for their interest in my work and certainly nicely explain why I cannot work with them. Maybe I don't like their policy, but I don't want to close the doors either. Who knows....

Hope that helps....
Patricia

charlie
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Postby charlie » Wed Sep 10, 2003 10:32 am

Patricia O'Neill wrote:A professional and honnest gallery should take responsability of the work they take on consignment. It must be stated in the contract or consignment aggreement.
A while ago, I learned that some states have statutes to protect the artist. Some don't. For examples, Arizona has such statutes and they are very clear about the responsabily of a gallery taking art work in consignment. I would bet that California has the same. If you need, let mw know and I'll find the link for you.
If a gallery refuses to insure your work, not only they are not correct in business but they most likely break the law.

That's your call.... However, since you asked what we would do.... personally, I would not want to work with this place. I'll thank them for their interest in my work and certainly nicely explain why I cannot work with them. Maybe I don't like their policy, but I don't want to close the doors either. Who knows....

Hope that helps....
Patricia


can you please point me at this set of laws? anywhere online?

i just signed last week a contract with an az gallery (my first one, so i'm just a newby at it) who explicitly stated that my art was covered if a customer broke it, but it wasn't insured for fire/theft/etc.

thanks mucho

Patricia O'Neill
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Postby Patricia O'Neill » Wed Sep 10, 2003 10:57 am

Hi Charlie,

Here is the link:
http://www.azleg.state.az.us/ars/44/title44.htm

Look into Chapter 11, article 12 "consignment of fine art". As per the definition, glass work is considered as 'fine art" by the text of law.

There is something that I found helfull (I too am starting and I don't miss an opportunity to learn): I have purchased a couple of marketing books from Milon Townsend. One is called the Marketing Companion. It shows about a dozen of different contrats with galleries (those are not mock-up but real contracts that Milon signed) and each term is commented. Very interesting. You can find it at http://www.thebluemoonpress.com

Hope that helps...
Patricia

Amy Schleif-Mohr
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Postby Amy Schleif-Mohr » Wed Sep 10, 2003 2:13 pm

Dick,

I have work in a gallery that doesn't insure the work and I don't self insure. BUT, the owners have impeccable (sp?) reputations and I spoke with them about insureance, and we agreed on what would happen if something is damamged.

I did this by gut feeling and in my personal circumstance that was enough for me.

Amy

charlie
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Postby charlie » Wed Sep 10, 2003 2:18 pm

Amy Schleif-Mohr wrote:Dick,

I have work in a gallery that doesn't insure the work and I don't self insure. BUT, the owners have impeccable (sp?) reputations and I spoke with them about insureance, and we agreed on what would happen if something is damamged.

I did this by gut feeling and in my personal circumstance that was enough for me.

Amy


in court, an oral contract with no other witnesses besides the involved parties is worth the paper it's printed on. damhikt.

Amy Schleif-Mohr
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Postby Amy Schleif-Mohr » Wed Sep 10, 2003 2:32 pm

I understand that Charlie, but in the intrest of keeping a good relationship with my gallery is more important to me than any one particular piece. And I am taking a stance that each situation needs to be evaluated on it's own terms and this particular gallery only has large work that isn't going to be moved, only when it's bought. This sort of issue is really a personal comfort thing, and with this gallery I am comfortable with the agreement.

Amy

Geri Comstock
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Postby Geri Comstock » Wed Sep 10, 2003 2:42 pm

Amy Schleif-Mohr wrote:I understand that Charlie, but in the intrest of keeping a good relationship with my gallery is more important to me than any one particular piece. And I am taking a stance that each situation needs to be evaluated on it's own terms and this particular gallery only has large work that isn't going to be moved, only when it's bought. This sort of issue is really a personal comfort thing, and with this gallery I am comfortable with the agreement.

Amy



Amy, I agree totally. Many consignment galleries don't insure work. Sometimes you just have to go on faith based on your personal relationship with them and your knowledge of their history; that was the point of the first story I told above. The owner of that gallery had an excellent reputation among other artists and treated me with respect. I was always paid on time and because he sold so much work for me, eating a little breakage was worth it for me. Two pieces in 5 years with all of the work he sold was nothing. Heh! There are some shows I do where someone careless will manage to break 2 or 3 pieces.

At the show I did this past weekend, From quite a distance away I saw a woman drop a piece of mine and it cracked. She had to have seen it was cracked, but she didn't say anything to me. I assumed it was okay because she didn't say anything. After that I got busy and forgot about it. A couple of hours later a regular customer pointed out the broken piece to me. Whatever. I can fix it.

When you work with glass, breakage happens. Some people are honest and act with integrity about the damage they've caused. Others don't.

Geri

Dick Ditore
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Postby Dick Ditore » Wed Sep 10, 2003 8:19 pm

Thanks for the replies. I understand both sides. Basically, if they are not insured you have to be willing to write it off. I know most of the time this will not be an issue, but want to be upfront. I am looking into insurance just to price it. I have heard horror stories of not only work being broken, but artists charged for damage that their broken piece did to something else. I want to be protected, and feel that if the gallery wants 50%, they should offer insurance. So far I have found insurance for transport, but not while in a gallery.

Update later.


Dick

Geri Comstock
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Postby Geri Comstock » Wed Sep 10, 2003 8:31 pm

If you find someone to unwrite such a policy, Dick, please let us know. The only one I can think of who might do it is Llyod's of London. They'll insure almost anything for the right price.

LOL.

Geri

Amy Schleif-Mohr
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Postby Amy Schleif-Mohr » Wed Sep 10, 2003 9:20 pm

Geri,
That's exactly what I was thinking. hahhaaha

Amy

Marty
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Postby Marty » Thu Sep 11, 2003 8:15 am

I find this casual attidude toward damage and loss disturbing.

"Sorry, your work just moved off its pedestal and smashed on the floor."

"Well that's ok, it was only glass and I'll be happy to send you another one."

We should not have to be concerned about the gallery's insurance coverage- your consignment agreement should say that the gallery will be RESPONSIBLE for the work while it's in their possession, and that they will either pay you for repairing the work, including shipping both ways, or pay you the wholesale cost of the work. Yes, frit happens, but YOU did not drop the piece, THEY did.

And I have to disagree with Geri about the customer who dropped and cracked the piece. I'd be burning! And yet if she had owned up to it I'd have said it was an accident and don't worry about it! If the idea is to avoid confrontation, then the booth should be redesigned or the work repositioned so you have more control over the situation. How about small "please ask for help with this piece" signs? I try to keep my bowls apart from each on my pedestals so that customers can move them or turn them without bonking one into another.

One of my customers sent back a bowl he bought at a show. "It broke", he said, implying that there was something inherently wrong with the bowl itself or that I had wrapped it poorly. It was in pieces but it had a large clamshell chip on the edge where it had been dropped. I would have been much happier if he had owned up to responsibility for the accident but the outcome would have been the same: "I'm sorry, I can't fix it, but I'll make you another and I'll only charge you the wholesale price (plus shipping)".

Lecture/rant over. I'm off to WGWE to rant some more.

Susan Wright
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Postby Susan Wright » Thu Sep 11, 2003 8:46 am

We do jewelry and I have had some breakage but what is really a disturbing thing is "theft". I had one store that I no longer would even walk in because of the "theft" problem. Seems out of 30 pieces on consignmnet 3 sold and 5 were stolen. They sent back the work with a check for the 3 sold and said so sad to bad about the other 5. This was one of my first consignment ventures. The contract said work was not insured against breakage, theft, etc.

I also pulled out of two co op shops because of similar problems. One now is my best selling shop but the manager is new, they moved the location of the shop with a major remodeling project and they are very dedicated to running a top notch shop. Before the shop was often open with no one in the shop for the whole day. To purchase you had to go to the front office of the center and try and find a volunteer. The jewelry cases were left open so people could browse. Several jewelers pulled out because of the same disappearing act. That was just poor management, the first was having financial problems and I figure I was a silent investor without consent.

Now I only do consignment where I can watch the stuff or I know the owners.

Susan W

Dani
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Postby Dani » Thu Sep 11, 2003 10:31 am

In my state, which has a law that follows the Uniform Commerical Code, galleries are required to insure the works of artists. If their contract specifically states they do not, the contract is automatically null and void. The only exemptions are government entities such as college galleries, shows at town hall, etc. You might check what your state's law is and use the opportunity to educate! Probably, the gallery owners will be quite surprised. That said, it also turned out for me that the business liability insurance only increased about $100 /year to cover consignment works.
And don't forget the new Nolo book I recently posted here that had all the great business/legal info for arts and crafts and included a CD with the various contracts. Can't remember the title..... (insert blue-haired emoticon). But it's under another thread in the business category.

charlie holden
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Postby charlie holden » Thu Sep 11, 2003 3:53 pm

The laws that protect people when other people are in possession of their property are sometimes called fiduciary laws. Fiduciary means -- involving a confidence or trust; held or holding in trust for another. That describes exactly the situation of consignment. The gallery is holding your work, (which is valuable because it represents your labor, not because it has any inherent artistic value), in trust for you. This is the same level of legal responsibility that banks and stock brokers have to live up to. Your bank is holding your money in trust for you.

The gallery in no way owns your work. The instant your work is purchased, your percentage of the price paid for the piece is yours and is considered funds held in trust for you by the gallery. Creditors of the dealer cannot take your work as payment for the dealer's debts. In fact, you are entitled to payment of your percentage before the dealer's fee is paid.

Consignment laws are a matter of state, not federal law. Some states have laws that automatically create a consignment agreement between you and the gallery when you deliver your work and the gallery accepts it, unless the gallery pays you in full upon acceptance. (AZ has a strong consignment law.) Some states have consignment laws that require written consignment agreements. (Oregon is one.) Most consignment laws will include rules about insurance. (Oregon's law does not require insurance.) You should be sure that you know the consignment law in both the state where you live and the state where your gallery lives. Or, you should have a standartd written agreement with all of your galleries.

A good provision to have in a gallery agreement is that the gallery has 24 hours after receiving the work to notify you if there is any damage during shipping. Otherwise, damage is their responibility.

This site has a list of many state code numbers for consignment law:
http://www.artslaw.org/STATES.HTM

This site has the Georgia state law, articles 520 through 529, if you want to see an example of how they are written.
http://www.legis.stat.ga.us/legis/2003_ ... 1-520.html

Jane Lindell
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Postby Jane Lindell » Thu Sep 11, 2003 5:55 pm

Thanks for the State Code reference site link, Charlie. This thread is particularly pertinent for me this week.

A new gallery wants to show several of my pieces beginning next month. The consignment fee is only 30%. But the consignment contract they forwarded for my review says I will only be reimbursed 30% if something is lost or damaged.

30 % is not enough. My other gallery is 50% fee, 50 % paid for breakage.

Iowa law says the consignor (gallery) is responsible for the full value of the work unless agreed in writing otherwise.

Still pondering my next negotiating step.

Jane

Dani
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Postby Dani » Thu Sep 11, 2003 8:37 pm

Jane, either this gallery is getting their numbers confused or they are intentionally trying to muddy the waters. If the commission is 30%, then you are getting 70% in which case the insurance coverage for loss should also be 70%. Do you follow me?

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Postby Paul Housberg » Thu Sep 11, 2003 8:38 pm

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