MIAMI — In January of 2011, HD House experienced a rental company’s worst nightmare: a new customer, whom they fully vetted and researched, stole $255,000 worth of their equipment in a single day.
“We checked his background, ran a credit check, read through the company’s entire Web site, and we even called the company’s insurer to confirm they held an active policy,” said Tony Perez, CEO. “We were shocked when we learned that this customer had stolen the identity of a reputable UK film producer, going so far as producing false identification and taking out a real insurance policy in order to commit fraud.”
When HD House filed a claim with the client’s insurer, the claim was denied because the policy was purchased with the intent to commit fraud. But less than 90 days before the fraud occurred, HD House had signed on with Take1 Insurance, which has specialized in insuring the live and non-live entertainment industries for more than 25 years.
HD House’s new policy with Take1 didn’t save them money compared to their prior insurer, but within hours of filing this claim with Take1, the wheels were turning on what ended up being a full payment of $255,000.
“As we were evaluating the risk profile of HD House, it quickly became clear they had outgrown their prior insurer “ said HD House’s insurance broker, Matt Kleinjan of the Jules Berlin Agency. “One of our key concerns was the collusion risk—i.e., how do we make certain their equipment is properly covered while it is out in the Care, Custody and Control (CCC) of a customer. We never like to rely entirely on the customer’s insurance, as it is often inadequate. In the case of fraud, the customer’s insurance is completely moot. HD House recognized this risk and fortunately made the decision to move their insurance program to Take1.”
“This was a highly sophisticated fraud,” said Scott Carroll, executive vice president of Take1. “The criminal stole the identity of a producer from the UK who had a solid credit history and a reputable industry background, then he took out a fraudulent insurance policy for the real company, making it extremely difficult to detect he was an imposter. HD House did its due diligence and followed very rigorous vetting procedures before agreeing to loan the equipment to this new customer.” Carroll noted that Take1’s broader collusion coverage “gives our insureds an added advantage when fraud is committed against them.”
HD House’s previous insurance company would have only been obligated to cover $140,000 of the loss as a maximum, and may have even tried to deny the claim completely, Carroll added. “Luckily for HD House, they had Take1 on their side.”
For more information, please visit www.take1insurance.com.
