Lending art to museums is an increasingly risky business.

Museums are no longer staid institutions where scholars and appreciative fans come to view and ponder serious works of art. These days, fund raising has turned museums and galleries into entertainment venues, with sometimes perilous consequences for delicate artworks and collectibles, insurance experts say. And, they add, budget cuts have left some museums with inadequate security to handle bigger crowds and protect the art. The upshot, these experts say, is that they are seeing more claims for artwork damaged at museums.

In February, radio network Clear Channel Communications Inc. hosted Martinifest, a promotional event featuring all the martinis you could drink for $30, at the Milwaukee Art Museum. Guests threw up next to the Dale Chihuly glassworks. Several young men clambered on and groped "Standing Woman," leaving the bronze sculpture by 20th-century American artist Gaston Lachaise slightly damaged. Another statue also was later found to have a damaged patina.

Earlier this month, a 1909 antique German Steiff teddy bear said to have been owned by Elvis Presley and on loan to an English children's museum was torn to pieces by the museum's guard dog. The toy bear was valued at about $75,000.

And at the Pompidou Center in Paris recently, a show titled Los Angeles 1955-1985 saw two fragile borrowed objects slide from the wall and shatter.

"These things are happening a lot more than they used to," says Dorit Straus, world-wide fine-arts manager at Chubb Corp., a major insurer of fine art for museums and individuals. Ms. Straus and other experts say art thefts make headlines, but increasingly, crowds and carelessness pose greater threats to art objects on loan to institutions. "Things happen even in the best museums," she says.

The consequences are compounded by the sharply rising value of many pieces of art. The fastest rising category, post-World War II and contemporary painting, saw prices grow an average 17.7 percent annually in the past five years, according to the Mei/Moses Fine Arts Index.

Insurers say collectors too often don't check whether their policies cover risks such as vandalism that exist when works of art are on public display. Instead, lenders assume the institution or gallery has adequate insurance, but this isn't always the case, insurance experts say. Art insurance typically runs 10 cents to 15 cents annually per $100 of insured value, and more in earthquake- or hurricane-prone areas.

Museums acknowledge that they are more crowded these days as they stage blockbuster exhibitions and events, in part because higher attendance allows many museums to apply for bigger financial grants. Other museums that sponsor events by corporations and charities include the Philadelphia Museum of Art, which rents out its Rodin sculpture garden, and the Detroit Institute of Arts, which hosts events in its Diego Rivera room.

"But our museums are doing an excellent job of installation and crowd control so that works of art remain safe," says Millicent Gaudieri, executive director of the Association of Art Museum Directors.

Some museums are changing their policies to minimize risks. David Gordon, chief executive at the Milwaukee Art Museum, says he would no longer host an event, such as Martinifest, "where alcohol is the main attraction."

"Now I have to personally approve anything that is out of the ordinary," Mr. Gordon says. Clear Channel, which put on Martinifest, "had assured us that they had procedures in place, and the procedures did not work," he says.

Clear Channel acknowledges that more people showed up at the event than had been expected, but says the museum was responsible for security at Martinifest, not the company.

Some collectors have witnessed damage first-hand. Michael Mendelsohn, an art collector and art-estate planner in Purchase, N.Y., says he once lent a sculpture by folk artist Howard Finster to New Jersey's Newark Museum. The sculpture was a plexiglass box studded with synthetic pearls. "When we got there, some little kid was pulling the pearls off," Mr. Mendelsohn says. A guard standing 15 or 20 feet away did nothing, he says, but the "horrified" museum director roped it off after he was alerted.

"It didn't kill the whole piece. But any collector is very particular, and it wasn't in the condition we gave it to them," he says. A Newark Museum spokeswoman says she couldn't find a record of the incident.

Museum visitors increasingly are touching and handling the art, a phenomenon that Mr. Gordon of the Milwaukee museum attributes to younger generations spending more time in front of computer and TV screens.

In February, a 12-year-old boy visiting the Detroit Institute of Arts with his sixth-grade class plucked a wad of gum from his mouth and deposited it on a 1963 canvas by Helen Frankenthaler, "The Bay," a painting estimated to be worth $1.5 million or more. The work had to be removed for restoration. The child "picked the worst piece of art he could have picked" -- an unprimed painting, says the museum's director, Graham W.J. Beal.

"They think they are shopping," says Rosamund Felsen about some visitors to her contemporary-art gallery in Santa Monica, Calif. "The artist could have been working for years on this; it's not like buying a car." Ms. Felsen says she's noticed visitors have begun bringing very young children and dogs into her gallery. "I don't mind the dogs so much because usually they are better behaved than the children," says Ms. Felsen, herself a mother of four.

One of the biggest risks for art collectors lending a piece is in the transportation, insurers say. Mr. Mendelsohn, the New York collector, recalls movers showing up to transport one of his best pieces, a 1938 William Edmonson carving of a mermaid, for a touring exhibition. The piece, by the first African-American artist to have a solo show at New York's Museum of Modern Art, had an insured value of about $750,000, but the mover was carrying it to the truck wrapped only in a blanket, Mr. Mendelsohn says. The collector told the mover to take the sculpture back inside, and not to remove it until it had been properly packed.

Before moving or lending any valuable art work, insurers recommend that collectors contact their insurance broker or agent, who can provide advice and referral to special art movers and shippers, and make sure there are no gaps in coverage. Some will even check out the security of the borrowing institution, they say.

Hub International Ltd. and Huntington T. Block, a unit of Aon Corp., are some brokerages that have expertise in insuring fine art and collectibles. Major insurers in the field include Chubb, AXA SA, American International Group Inc. and Allianz AG's Fireman's Fund Insurance Co. Unlike other types of coverage, a good art insurance policy compensates the insured not just for the cost of repair or replacement value of a piece that is damaged, but also for its diminished value after a repair. In the case of sets, such as a triptych or silverware, a damaged or missing piece could diminish the value of all the objects in the set.

Ella Fontanals Cisneros, a Miami collector of contemporary and Latin American art, says she requires museums to meet a rigorous set of conditions, including temperature control, insurance and security before lending her art. If they can't meet any one of them, there's no deal. "We are very, very careful," she says. "There is a risk that you have to take, but you can control the risk."