Banker's Blog: Insurance

Is your artwork insured? I hope so! Now that we have established this fact, I will move on to the topic of this blog, which is not about obtaining insurance. Instead, I am going to discuss what to do after you have our work insured. If you read no further, at least read this:

It is extremely important to keep a record of your current inventory and a record of past sales!

As they say, hope for the best, but prepare for the worst. We can all hope that nothing will ever happen to your artwork, but no matter how careful you are, things do happen. If your artwork is lost, stolen, or damaged, the first thing your insurance agent will ask you is this: What is the value of the piece? The second thing will be: Prove it.

Can you prove it? Do you have a record of similar works and what they have sold for in the past? No? Then you might be out of luck.

Simply stating the retail price of the piece to the insurance agent won't cut it. Unless you have proof you have sold work just like it or similar at that price, the retail price means nothing to the insurance company. They are interested in the market price, meaning what price buyers will actually purchase it for.

Inventory your existing work and your sold work.
o Photograph all work. If you don't have skills in this area, hire a professional to do it. It is worth the money! Don't forget to photograph the piece from all angles.
o Record sizes, medium, and all other details of the piece including the date of sale.
o Keep all paperwork involved with a sale- invoices, copies of checks, etc. (You should have all this for bookkeeping purposes anyway, but be sure to keep it on file!)
o Create a comprehensive record of sold works in one place. You may try keeping a notebook or photo album that includes an image of the piece sold piece, the details, the price it sold for, to whom, and date of purchase. Even better, if you have a website, mark works as sold with the sale price and any other pertinent information.
o Have a back up of all this information off site -- away from the work itself. (A website is a good place for this!)

If, in the event of a claim, you are able to hand your insurance agent this comprehensive record, it will greatly speed up the process and likelihood that the claim will go through. Having a link to send to an insurance agent is a good start towards proving your past sales, but they will also want to see the paperwork to back it up!

Artwork Network provides a solution for our members by including a sold section with their online gallery. We will load any work sold by that artist even if it was sold before they were a member. But, like any tool, it is only useful if it is utilized.

Keep in mind that the same process applies even if work is damaged while in the possession of someone else. First off, the third party is not obligated to claim the loss or damage on their insurance. If they are nice enough to do so it will still be up to you to prove the worth of the piece.

Basically, if you are insured, but cannot prove what your artwork is worth based on previous sales, than you will likely only be able to claim the cost of materials for the piece.

The information provided above is based on our past experience only. Please talk to your insurance agent if you have any questions.

Banker's Blog: Financial Organizational Tips

Introducing a new blog series: Banker's Blog

Did you know that the founder and owner of Artwork Network started his career as a banker? Alan Kircher parlayed his love of art and respect for the creative process into a successful business helping artists market their work online. He also has a passion for helping small businesses manage their money.
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As tax time looms you may be dreading the thought of filing, especially if you are self employed, as many artists are. It is often just a matter of keeping your finances organized so that that tax time doesn't drain you of energy to create.

Here are some financial organizational tips:

• Open a separate business checking account and use it only for business expenses.
• Open a separate business credit card account and use it only for business expenses.
• Keep your statements in separate files labeled by account.
• Keep all of your receipts and separate them by category. For instance use 8.5" x 11" white envelopes. Label each with its own category Supplies 2009, Marketing 2009, Equipment 2009, etc.
• Another idea is to organize your business paperwork into a large binder. Make tabs for each of your accounts and insert the statements. Make a tab for expenses and hole punch your big envelopes or use page protectors labeled with each category. Insert your receipts as you get them. Now everything is in one place and you can find it all at tax time, or hand it over to your accountant.
• Use bookkeeping software or hire someone to enter your information for you.
• If you have not entered your finances into a software program, at the end of the year enter each category onto a spreadsheet (don't forget those items you paid cash for!) and total- this make it easy to enter into tax software,for you or your accountant.
• If you are filing your taxes yourself, use an online tax filing software like turbo tax.

Also, keep in mind, that even if you have another job, it is important to keep track of your art related expenses as well. Even if you are just starting out with your art career, getting in the habit of organization will save you a lot of headache in the long run. You never know when your business may grow, and along with it the paperwork!