Friday, 4 November 2016

GIS and Loans by Carol Warner, Manager, Government Indemnity Scheme, Arts Council England

We all appreciate the benefit of GIS in supporting our sector, indeed without it, many of the amazing loans and exhibitions that make our jobs such rewarding ones, could not happen. ACE estimate the scheme saves the sector £15 million pounds a year, from supporting recent loans as diverse as the stunning Ostro Topaz to King John’s teeth!

Although most registrars have a well-thumbed copy of the GIS guidelines to hand there is always more to learn so it was interesting to hear from Carol Warner, who manages the scheme for ACE, with some updates and FAQ’s.


The focus of the presentation was a summary of the new guidelines around the conditions precedent. These must now form part of the loan agreement though a side letter or email (moving with the times!)  is permissible as long as that letter or email references the original loan agreement and does not contradict it.  Without the conditions precedent included, the basis on which cover has been provided is null and void and there is no legal basis for paying a claim.

Carol then ran through a number of the most commonly asked questions about GIS and rather than going into detail here, you can find them and their answers in the copy of her presentation now available on the UKRG website.



She also looked at a number of queries from lenders which are becoming more common and what the solutions are;

War and /or Negligence clause - this can be covered if some set questions can be answered. For example if war cover is requested during transit details of transport and routes will be requested.

Comfort letter regarding claim process – This confirms the process and procedure should a claim be made.  Once ACE is satisfied with a claim they will pay in 4-7 working days.

Inalienability –  The concept of inalienability is not recognised in English law but ACE can issue a comfort letter stating that “ the indemnity offered by the UK Government does not affect title to the object” In England it is possible that title may be transferred to a finance company or retained by the owner. Whoever has the title must be listed on the indemnity schedule otherwise this may make it invalid.

Contingency or Difference in Condition insurance is an increasingly frequent request from Italian institutional lenders. This usually requires the borrower to pay a premium to the lenders insurance agents to cover everything not covered by GIS.



Touring exhibitions – GIS cover for transfers.
Having recently negotiated two different agreements with partners for two similar touring exhibitions I was very interested to hear what the advice would be. Carol advised that where a UK partner is the lead partner for a tour then two legs would usually be covered. Otherwise the benefits to the UK public have to be demonstrated and the cost of commercial insurance calculated to show the savings which could be made.

The full presentation is now on the UKRG website and further information can be found on the link below.

Thanks to Carol for the update and thank you to UKRG for giving me a bursary towards the cost of attending the AGM event.

By Jacqui Austin, Lead Registrar: Loans, touring & partnerships, National Galleries of Scotland

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