Detailed Discussion

Artists and arts workers, whether they are self-employed, sub-contractors or in business with or without employees, require different forms of insurance coverage across their professional careers. 

Public and commercial galleries, residencies, retail outlets and other arts organisations also have insurance requirements. Some have capacity to cover part of an artist’s risk, for example, when works are on exhibition or on consignment, but there are often limitations on such cover.

Key Issues

The high cost of insurance premiums is a deterrent to many organisations, artists and arts workers. Premiums are impacted by the nature of activities being undertaken, but also by overall market conditions. Due to an escalation of catastrophic natural disasters, a growing number of public liability claims, and an increasingly litigious society, the cost of insurance premiums has increased while options for cover have decreased.

It can often be difficult for artists to find an appropriate policy that covers different types of practices and activities for an affordable price, especially if an artist or arts worker undertakes varied forms of work.

Dedicated art, craft and design oriented policies exist, and some service and support organisations, such as NAVA, have negotiated tailored policies to meet the needs of members or associates. However adequate and affordable insurance in the sector remains a major challenge.

Legal requirements impacting on insurance, civil liability and workers compensation can vary between states and territories, and laws change with some frequency. 

Arts Law's factsheet on Liability and Insurance can assist in understanding your legal responsibilities and how to safeguard against risk.

The following insurances are relevant to the arts industries. 

• Workers Compensation: Compulsory for employers, workers compensation covers employees against any injury sustained during the course of their employment. Employed artists and arts workers will be covered while at work, engaged on legitimate activities associated with their employment, or while travelling for work, or on behalf of the place of employment. 

• Public Liability: Individuals and groups have a duty of care towards members of the public observing or participating in activities. Public Liability insurance covers ‘acts of negligence’ and liability for death, bodily injury or property damage/loss (to members of the public observing or participating in activities) caused by yourself, your group or your employees failing to act with ‘reasonable care’. It also covers legal liability as owners or occupiers of premises for bodily injury caused as a result of the state of the building or its surrounds and liability for injury, sickness or death caused by products you sell or supply. 

• Product Liability: This covers legal liability towards members of the public for an ‘act of negligence’ in the manufacture of work leading to injury, sickness or death from products sold or supplied. For example, textile items may contain a dye that could cause illness or a ceramic cup may have an un-sanded edge, or radioactive glaze which could cause injury. It may not cover any fault in the actual design of the product. In Australia the term 'manufacturer' includes importers of foreign products as well as those manufacturing the product.

• Professional Indemnity: This facility provides cover for the breach of a professional obligation or advice given on a professional basis. Professional indemnity insurance provides for loss resulting from claims made against the insured for breaching their professional duty, for example an accountant giving faulty tax advice to a client or an engineer incorrectly specifying foundations. It may also be extended to include loss of documents, defamation, breaches of the Trade Practices Act (which is incorporated into the Australian Consumer Law, within the Competition and Consumer Act 2010), and breaches of copyright. Claims can be made for a number of years after the work has been completed and unless there is a current policy in force at the time that a claim is made, it is possible that the artist will not be protected.    

• General Property Insurance (Building and Contents): This type of general property policy is similar to home and contents insurance. This policy provides protection of private or commercial premises against loss or damage caused by burglary and other specified threats. It includes repairs, reinstatement or replacement to buildings contents and stock and may also include money on premises, damage to plate glass and property owner’s liability.

• Personal Accident and Illness (Income Protection): Provides for loss of income for self-employed persons resulting from either accident or illness. It covers the payment of (either or both) a capital sum and a weekly benefit payable up to the maximum stated period set out in the policy. This type of policy usually only applies to income made from labour, not from pensions. The weekly benefit may be calculated at a percentage (e.g. 85%) of the insured person’s gross taxable earnings averaged over the past 12 months.

• Goods in Transit: This policy is desirable where comprehensive cover (theft, breakage, damage, guaranteed ‘floor to floor’ delivery) is required for art/, craft or design works in transit by any form of freight or transport within Australia. This definitively covers the ‘grey area’ of exactly whose responsibility it is for works in transit and should be considered for valuable consignments.

• Tenants Liability: This is usually an extension to a public liability policy protecting tenants against claims for any damage negligently caused to any property being rented. For example, spilling chemicals on a carpet where the carpet has to be replaced would be covered under this policy.

• Goods in Physical and Legal Control: This protects you against claims arising from other people’s goods in your control or on your premises that you negligently lose or damage. This is suitable for galleries, shops or any exhibition space or storage where you have other people’s art, craft or design works on consignment or in your care and control.

• Voluntary Workers Insurance: This covers accidental death or permanent/temporary injury of a person while engaged in voluntary work on behalf of your group, i.e. any arts association/council meeting or activity.

• General Small Business Insurance Package: This type of insurance package usually includes public and product liability, general property and personal accident and illness insurance. If you are making the majority of your sales online this package is a good option to make sure you are receiving all the coverage you require.

Councils, galleries and other arts organisations are responsible for insurance related to the type of work they do, such as event coverage, public liability and workers compensation. 

When entering into agreements with artists, organisations will usually outline their insurance expectations in a contract for artist and arts workers to review. The contract will likely be templated, but it is good practice for the organisation to check through the clauses prior, to use to ensure it is relevant to the project and individual.  

Organisations should be amenable to discussing the terms of a contract with artists and arts workers, including resolving any questions or issues, prior to signing. This may involve changing insurance requirements or assisting with insurance costs.

Artists are responsible for individual insurances such as professional indemnity and income protection. 

Artists with employees are legally required to hold workers compensation insurance. Note that the definition of an employee/worker changes from state to state.

Artists who own or occupy a space may need to hold public liability insurance, as well as identifying and minimising risks. If you think you are covered under someone else’s public liability policy it is important to find out to what extent to make sure you are not open to any liability. 

Even if an artist has no other insurance cover, they may find that public and professional indemnity is compulsory when they are engaged as independent consultants or contractors on public art works or other major commissions.

Once you have understood your duty of care and identified and minimised risks, the next best step is to determine the important areas of work to insure. Ensure that you are covered in all the areas you undertake extra risk and avoid taking out multiple policies. In some cases, a general business policy which will cover risk in a number of areas is the best solution. While there are helpful resources available, it is recommended to seek legal advice on any specific issues.

When entering into agreements, artists are responsible for closely reviewing any insurance requirements to ensure:

• their current coverage matches the requests (if they are a policy holder)

• the insurance requests are appropriate to the project

• that any new or extra coverage requested is a justifiable purchase and can be used again 

Artists should negotiate terms if they believe insurances requested are unreasonable. If an organisation remains eager for extra insurance or coverage amounts artists should discuss the issue with their insurer or broker to gain professional advice on risks and/or quotes. Informed negotiations can then take place. Artists may request that organisations change requirements or assist with insurance costs.

Conversations around insurance need to take place when artists, arts workers and organisations work together on a project, initial discussions should assess gaps and/or overlaps in cover and whose responsibility it is to gain coverage or add to existing policies. Negotiated insurance arrangements should be captured in a written agreement. 

Common insurance misunderstandings arise around: 

• Contents Insurance: When negotiating contents insurance, in particular insuring against an artwork being damaged or stolen while on loan, exhibition or consignment, it is best practice for the individual or organisation in possession or control of the artwork to take responsibility. There may be situations when this advice does not apply, such as a pre-existing policy connected to the artwork. 

• Workers Compensation: An artist or arts worker who is a sole trader undertaking a project by themselves should not be requested to obtain workers compensation insurance. This form of coverage applies only to parties engaging employees. Typically, this is requested when an organisation uses a template contract and it is not edited.

• Professional Indemnity: An organisation may request that an artist increase their professional indemnity coverage for the purposes of a specific project. While this is often a requirement for artists working on public art works and other major commissions it is unlikely that an artist would require more than $5 million in coverage due to the low risk of an artist causing a large claim related to their professional advice.

• Goods in Transit: Agreements should clearly outline the responsibility for covering theft, breakage or damage to works in transit.