Decisions are typically guided by specialists whose judgments balance material repair against long-term market perception. Observer Labs

Fine art insurers hear lots of sob stories—“the maid attacked it;” “a water pipe burst and sprayed water all over it;” “movers dropped it”—but more important than what happened to an artwork is whether it can be repaired.  Can the work be fixed for less than the overall value of the piece? Has the damage lessened the value of the object? Is the artwork a total loss? Entire teams set about puzzling out the answers to these questions, with claims adjusters, art appraisers, art conservators and sometimes even dealers. And the final verdict may not be entirely up to the insurer. “The owners of the artwork may get their own experts,” Dorit Straus, an independent fine art insurance adjuster, told Observer. “You have people on one side and people on the other. It’s always a delicate conversation.”

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Those conversations may start out diplomatically but can become all-out wars when parties disagree. Billionaire art collector Ronald Perelman sued a consortium of insurers for $410 million, claiming that five paintings in his collection—a Cy Twombly, two Ed Ruschas and two Andy Warhols—suffered smoke damage in a 2018 fire at his Long Island, New York estate. In his lawsuit, Perelman asserted that his artworks had lost their “spark” and “oomph” as a result of the smoke. The insurers contended that none of the five artworks was actually damaged in........

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