Insuring cultural property

The extensive experience of Consorcio de Compensación de Seguros (CCS), within the scope of the Extraordinary Risk Insurance has implied having to cope, in many occasions, with losses in unique properties and assets, normally of a cultural nature, such as historic buildings, works of art, libraries and others.

Cultural heritage is understood to be the assets making up Spain's Historical Heritage that have been accorded a special classification under our country's national legislation. Cultural heritage assets also include real property located anywhere in Spain not owned by the central government that is protected in that category under the legislation of Spain's regional authorities, the Autonomous Communities.

Given that the key theme chosen for edition 17 of the magazine Consorseguros Digital is "insuring cultural properties," on 24 October 2022 we ran an interview at the Ministry of Culture and Sport (Ministerio de Cultura y Deporte, MCD), which was arranged as an informal chat, whose aim was to gain a deeper insight into how the State Guarantee functions for works of cultural interest.

The artworks sector has been in the throes of a boom in recent years, driven by growing numbers of new collectors. Interest by governments in mounting temporary and permanent exhibitions as tourist attraction magnets has a clear economic impact that kindles the interest of multiple economic operators. The insurance industry has concomitantly been tailoring its products to the increasingly sophisticated needs of the owners of works of art and collections.

Exceptional buildings are key features in every city, a small number of heritage buildings that live alongside modern architecture, adding personality to the urban landscape. Their value as emblems of the history of civilisation is incalculable. Most of us will agree that they are entitled to special consideration in terms of both conservation and insurance.

"Human error", weather events, transport, and cleaning and maintenance accidents are some of the main causes giving rise to most losses to our cultural heritage. In referring to cultural heritage, we mean all the property and assets owned by an individual or an institution that hold traditional, artistic, historic, or archaeological interest for a community.

Based on their own experience and some examples, in this article the authors attempt to explain very briefly the method and substance of loss adjusting for listed buildings classified as BICs (Bienes de Interés Cultural - Cultural Heritage Assets) in Spain and other exceptional heritage buildings that do not enjoy that classification yet nonetheless are part of a city's or town's heritage and identity after they have been damaged by an extraordinary event covered by Consorcio de Compensación de Seguros (CCS).

In recent years the effect of climate change has exacerbated the problems associated with our encroachment on flood zones, compounding the damage caused by each event. The conventional approach is based on controlling the source of the flooding (river courses, tides, rainfall, etc.), reinforced by self-protection measures taken by the inhabitants and buildings affected.

The health situation caused by COVID-19 first made itself felt in China in late 2019 and subsequently spread to Europe in early 2020, leading the World Health Organization to raise the level of the COVID-19 public health emergency to an international pandemic on 11 March 2020.

The 2021 Disaster Barometer [Barómetro de Catástrofes 2021] is the first report in Spain to quantify and assess the main natural disasters that took place in Spain the year before: the causes, nature, toll in human life, property damage, and costs to institutions and the insurance industry, plus social vulnerability and resilience indices and metrics.