Items Held in Part Shares
11 November 2011
Items held in part shares
It is a common practice in the antiques and book trades for expensive items to be bought jointly, in part-shares, so that costs can be mitigated and profits shared. As this practice becomes more popular amongst ABA Members, it is worth considering the implications for insurance and dispute resolution.
Richard Thompson Insurance Brokers (RTIB) advise booksellers to be careful about entering into agreements that are not clearly defined and which, in the event of a loss, could lead to disputes and potentially affect reputations. Regardless of the arrangements of ownership between dealers, which in most cases are well defined, having your insurance arrangements carefully agreed and documented will lead to speedy settlement of claims and will avoid protracted arguments, especially where more than one Insurance company is involved. When acquiring items in part-shares it is essential to clarify the insurance arrangements with all parties involved.
RTIB suggest that booksellers agree one of the three options below and have drafted corresponding letters of agreement for stock in part-shares. The suggested wording of this letter is available at www.rtinsurance.co.uk/documents
Options:
1. You insure all the items whilst they are in your care custody and control Items in part shares will be insured by the Dealer who has agreed to take consignment of the items - including whilst items are in transit and on exhibition anywhere Worldwide. You agree that items in part shares will be insured 100% by you regardless of their location including whilst the items are in transit and on exhibition anywhere Worldwide while they Are in your care, custody and control. It will remain your responsibility under these circumstances to ensure that the items are stored in secure and reasonable premises and are transported by reasonable methods using competent and appropriate forwarders. If the items are held by the joint-owner you maintain cover for your share of the items only.
2. Your partner(s) insure all the items whilst they are in their care custody and control You agree that items in part shares will be insured 100% by your joint owner(s) whilst they are in their care custody and control, regardless of their location including whilst the items are in transit and on exhibition anywhere Worldwide. It will remain your responsibility under these circumstances to ensure there are appropriate documents agreeing this arrangement in order to protect your own interests.
3. You only insure your share of the items wherever they are located You agree to arrange insurance for your share of items, including whilst items are in transit and on exhibition anywhere Worldwide. You are not responsible for the joint-owners share.
RTIB believe that Option 1 is generally the most suitable and is the simplest to adjust in the event of a loss. In this case the Insurers will pay settlement to the dealer last in possession, leaving it to that dealer to remunerate their partners as per their agreement of the part shares.
Finally you may wish to check that your partners hold appropriate insurance, and that their Insurers are happy to hold you harmless in respect of the items you hold in part share with them.
If you would like to discuss this issue with RTIB please contact us at 01932 349 732