An Emerging Dilemma: Absolute Liability in Museum Loans Public Deposited
This paper aims to present the state of absolute liability in the context of museum loans. Incorporating interviews with museum, law, and insurance professionals, this paper determines what absolute liability is, what the history of it is, why some lenders are requiring it, what the issues with it are, and how the museum field could limit it. With increasing frequency, lenders want borrowers to accept absolute liability which guarantees compensation for any damage to the loaned object no matter the cause, disregarding coverage offered by insurance. This increases the likelihood that the borrower may be required to pay a claim out-of-pocket rather than with insurance, posing a major financial risk for most museums. There are many different types of absolute liability, and it can be difficult to identify it in loan agreements. Lining up changes in the art market and economy, I can estimate that absolute liability likely began increasing around 2007 when art values were high. Seeing their art as major financial investments, collectors became cautious, requesting stricter terms in loan agreements that disregard standard practices. Absolute liability causes significant issues for borrowing museums, while the lender benefits. There is no way to completely do away with absolute liability, but lenders and borrowers could work together to understand how it affects each side.
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