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By STEVE YAHN, who has been a reporter and editor for national publications.

Picasso. Monet. Matisse. They are some of the most well-known -- and valuable -- names in fine art, and just last week, a group of brazen thieves made off with millions of dollars worth of their paintings while robbing the Kunsthal art gallery in Rotterdam, Netherlands.

That was a mistake, say art experts.

Although Kunsthal Director Emily Ansenk declared the museum's security system was "state-of-the-art" and "functional," most art experts remain skeptical.

"It just sounds like a breakdown of security," said Eric Fischer, senior vice president at the Washington D.C. metropolitan office of Willis.

"Whoever did it had to have some kind of knowledge that there was going to be a delay where they could get in and get out with that many works of art," said Fischer. "Paintings are wieldy and visible objects. Obviously they had to have time to take that many."

Fischer recommended that the museum start requiring an on-site, 24-hour physical presence of guards as opposed to strictly electronic surveillance.

Fischer observed that the Kunsthal heist "could have some impact on the level of information that underwriters are going to ask for shows traveling to Europe in terms of security."

In this case, the art treasures came from the collection of the Triton Foundation, which includes a vast array of avant-garde art put together by multi-millionaire Dutch businessman Willem Cordia and his wife, Marijke Cordia-Van der Laan, who died last year.

The stolen works of art were Pablo Picasso's 1971 "Harlequin Head"; Claude Monet's 1901 "Waterloo Bridge, London"; Henri Matisse's 1919 "Reading Girl in White and Yellow"; Paul Gaugin's 1898 "Girl in Front of Open Window"; Meyer de Hann's "Self Portrait" around 1890, and Lucian Freud's 2002 "Woman With Eyes Closed."

Ansenk, the museum's director, said these paintings along with other works in the museum's exhibition, were insured, and a source with knowledge of the situation said they were insured through Hiscox Ltd., an underwriter at Lloyd's of London. A spokesperson for Hiscox was not available for comment.

Dorit Straus, New York-based fine art manager at Chubb underwriters, noted that collectors loaning their works of art to museums should require a specific number of guards in galleries in which their work is exhibited.

"If it's a small work," she added, "a collector should require that it not be placed in a place where somebody can just grab it and run off."

And museums should also use specialty security installation hardware to help secure the works of art to the walls, making it harder for people to steal, said Adrienne Reid, Houston-based assistant vice president for Huntington T. Block Insurance Agency Inc.

"There's very cost-efficient hardware available that requires a specialty tool to be able to remove the art from its hanging device on the wall," said Reid.

"So, in this instance, the alarm sounded and the police reportedly were there in five minutes, but the thieves were able to snatch the art very quickly and escape," she noted. "Lock-in security hardware would have helped delay their quick get-away."

The Kunsthal thieves should have a tough time selling their new possessions. The Art Loss Register, a widely watched international website for stolen works of art, immediately posted information about the robbery. Likewise, Interpol and Dutch authorities swiftly swung into action.

"With these major works of art, it's extremely hard, almost impossible, to turn them over after they've been stolen," said Reid. "Any auction house, museum or dealer worth its salt checks the Art Loss Register before they make any purchases or do any transactions with any works of art. Oftentimes, it's through that mechanism that works of art are recovered because it pops up as stolen goods."

Stolen paintings usually end up in the underground art market -- sold for contraband goods such as drugs. They also can end up sitting in storage for long periods of time. But transferred in this way they invariably are traded for a fraction of their true market value. Art thieves may also try to seek a ransom from the owners, the museum or the insurers, but again usually only at a fraction of their true value, say experts.

The aftermath of the Kunsthal heist is the perfect opportunity for the insurance industry to conduct a worldwide "State of Museum Security" report to assess current conditions and make recommendations about up-to-date, comprehensive standards.

"I think that, if insurance companies are going to insure works of art on loan to museums outside the United States, they need to have some kind of a rating program in which they rate museums' levels of security," said Scott Hodes, Chicago-based senior counsel for Bryan Cave LLP international law firm.

"I believe a study needs to be done by insurance companies," said Hodes, who represents the famed Christo and partner Jeanne-Claude, and is a trustee of the National Museum of Mexican Art in Chicago. "It's their ballgame. It's going to cost them some money, but they should send experts into various museums around the world to analyze the levels of security. They need this information before they issue a policy."

Collectors considering loans of any of their works of art should immediately have brokers work with insurance companies, since they have "vast knowledge of many, many museums," said Chubb's Straus. "Not only the external envelope, but the internal envelope and the way things are installed."

Once the broker and underwriter have been lined up, the next step is to review the loan agreement between the collector and the museum, and to review the museum's insurance policy as well. Most U.S. museums have private insurance, but overseas they may be covered by various government indemnity programs such as in the United Kingdom, Spain and France, Straus observed.

After reviewing the museum's insurance protection, a collector should make a decision about whether they still want to retain their own personal insurance to serve as covering the envelope -- or contingent insurance.

In addition, collectors should consider whether their art can withstand the rigors of travel.

"It's great that people want to share their collection," said Straus, "but they should do it deliberately and thoughtfully and involve their insurance broker and insurance company, and sometimes their lawyers, throughout the process."

October 23, 2012

Copyright 2012© LRP Publications