From an article at http://www.artinfo.com/:
Why is it important to have title insurance on an artwork?
For one thing, it creates financial permanence and security in the art transaction, which can’t happen without a third-party insurance product behind it because of the way art transactions are done in the world. So, for example, just because there may be an indemnity behind a transaction, it doesn’t mean that a company will have the financial stability to provide that indemnity. So unless you have a third-party risk-transfer method, you can’t have finality to the transaction. It affects everything from your typical buying and selling and gifting to how a trust and estate attorney might create the trust and estate plan.
The other issue is a valuation issue. Title has an effect on the economic value of a work of art, and it’s just not a credible valuation without understanding the ownership issues. If you have a piece of real estate where there are liens and encumbrances on it, nobody would buy it unless they were assured clear ownership. So it’s an application of valuation that every single asset class goes through, and up until now nobody really thought about it from an art perspective.
From Art Rent and Lease: If you're purchasing artwork, consider utilizing title insurance. If you're interested in leasing or renting artwork from any our artists (never a provenance issue!), please contact us at (888) 440-9260 x710 and visit our website: http://www.artrentandlease.com/