A substantial incidence of fire losses arises when there is a downturn in the economy.

Indications that all is not fortuitous are not always easy to assess, as very often the fire destroys most of the evidence of a deliberate act.

Three essential indicators are:

1. Accelerant on the premises
2. Insured recently on the premises
3. Insured in financial difficulties

Other factors which should be taken into account include:

• Over-insurance or last minute increase in cover
• Previous criminal record
• Failure to issue accounts for the past few years
• Failure to register for VAT
• Removal of valuable items immediately prior to the fire
• Elaborate and complicated version of events to prove an alibi
• Vague and unsatisfactory alibi
• Insistence on high level of confidentiality before establishing alibi or releasing documentation
• Prevaricating tactics when information requested or lack of co-operation
• Exerting pressure to settle claim quickly by threatening to advise senior management, the media, Ombudsman or take legal action
• High degree of indifference shown to insurers and the processing of the claim
• Unusually high level of knowledge of insurance practice and procedure
• Eagerness to compromise the claim without good reason or subject to the need for further evidence being dispensed with
• Refusal to sign statements but rather deal over the telephone
• Inconsistency in statements at scene of fire when compared with later enquiries
• Inability to produce satisfactory documentary evidence as to quantum or production of excessive amount of documentation to substantiate claim
• Submitting bills or receipts from one supplier only
• Similar handwriting on bills or receipts purportedly from different suppliers
• Loss in the early period of the Policy!

This is not an exhaustive list, but an extract from Expert Evidence in Fraud Cases given by Derrick Cole at a seminar on "Fraud in the Electronic Age".

Derrick is a Vice-President of the British Insurance Law Association and manages Associated Experts in Insurance. He is also an Associate of ISL.