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Contingent Liability: National Gallery

Volume 693: debated on Wednesday 28 April 2021

I am tabling this statement for the benefit of all members of this House to bring to their attention the departmental minute issued today that provides the House with notice of a small, short-term contingent liability created by my Department. This is in relation to an exceptional exhibition arranged by the National Gallery in partnership with the Polish Cultural Institute, and pertains to specialist indemnity insurance coverage protecting five artefacts from harm or damage, required throughout the period of transport and display. The National Gallery, an arm’s length body of Government sponsored by the Department for Digital, Culture, Media and Sport, will be incurring the liability.

The National Gallery will on 17 May 2021 open its eagerly awaited exhibition “Conversations with God”, with Jan Matejko (1838-1893)’s epic painting of astronomer Copernicus—a Polish national treasure—at its heart. Successive delays caused by covid-19 have frustrated the schedule and logistics of this exhibition, the first devoted to Poland’s national painter, whose works are very seldomly loaned.

The complexities of transporting fine art across Europe mid-pandemic, related pandemic stipulations, and works of particular national importance, are such that Polish lenders have requested an indemnity directly from National Gallery in the event that any of the artworks suffered damage, in addition to the fine art coverage provided by the Government indemnity scheme. Despite the UK’s Government indemnity scheme enjoying widespread recognition as the “gold standard” amongst such schemes, the Department has agreed to this additional layer of coverage—a particular lender requirement under Polish law—in view of the exhibition’s exceptional content and timing. The indemnity would be in place for four months (May to September 2021), up to the consignment of artworks’ total value of £5.6 million and therefore represents a contingent liability. The likelihood of the contingent liability crystallising is remote. Furthermore, a claim would be far more likely to fall at the lower end of the monetary scale provided for.

In the event that loss or damage to an object occurred, the lenders would have the right to request compensation directly from the gallery, should it believe the Government indemnity scheme or a commercial insurance product to be inadequate or unduly inaccessible. The Department is confident, however, that the risk is very low, given the comprehensive nature of Government indemnity scheme coverage and its excellent track record in meeting the rare claims brought by lenders. The Department is further reassured by the rarity of “total loss” cases, with only one such pay-out under the Government indemnity scheme in the past decade, and by the National Gallery’s exceptional standards of care, which has submitted no claims under the Government indemnity scheme for at least the last 20 years.

A copy of the departmental minute will be placed in the Libraries of both Houses.

The attachment can be viewed online at: http://www.