Cultural Heritage and natural disasters: the insurance choice of the Italian Cathedrals

Abstract

Given the threat of natural disasters to Cultural Heritage, this paper aims to investigate how the use of the insurance instrument contributes to the definition of an adequate risk management strategy. The analysis focuses on the role that insurance can play both by supplying policies covering damage and proactively stimulating prevention behaviors, taking into consideration information imperfections (i.e., adverse selection, moral hazard and charity hazard). Through a survey among Italian Dioceses, data about the diffusion of insurance contracts were collected together with other qualitative and quantitative elements linked to the decisional process of insuring Italian Cathedrals. The empirical analysis shows that the administrators of the Dioceses are aware of the economic value of the cultural assets and in safeguarding the Cathedrals they identify in the insurance system a useful and efficient risk management instrument.