Here at Cut ‘N’ Run Studios, we like to focus on our craft–creating and producing wonderful content for the world to enjoy. However, sometimes we come across some important issues that need addressed that aren’t as glamorous as the latest gear and cool techniques.
We had recently discovered an exclusion in our insurance policy that is called “voluntary parting”. While doing other research and contacting local production companies and rental houses, they reported back to us that their policies also include voluntary parting. So, what is it and what makes it post-worthy?
It is a clause or exclusion in most insurance policies, not just for production, that does not insure the damage or theft of the policy holder’s property. How it works is similar to how it is titled: you voluntarily part ways with your equipment, property, or even money in some instances. For example, a genuine-sounding person calls your studio and says they have a project coming up and need to rent equipment. You discuss details over the phone, schedule the meeting, and they even pay you. The day comes that they pick up their rented equipment and you send them on their way with your gear.
Time passes and something is missing from this transaction. Your gear. The customer never returned the gear or called to talk about anything. Sure, they paid some rental fees, but your rental prices are nowhere near the same cost as the actual items themselves. They pulled a fast one and stole your crucial money-making equipment.
Of course you don’t need to panic because you have insurance, right? Well, that’s the theory. You call your insurance company and they explain that you aren’t covered due to the voluntary parting exclusion in your policy. You then argue that you didn’t voluntarily ask them to borrow your equipment with no intention of returning it–that’s theft! They say that you should have done more research into your client and that even though you got duped, you aren’t covered.
Voluntary parting applies to monetary transactions, too. There have been a few articles posted throughout the internet with examples on times companies have gotten tricked by people with no help from their insurance companies due to the same exclusion in their policies.
This is one way insurance companies try to protect themselves from fraud. They think that it might be too easy, citing the previous scenario as an example, for someone to “rent” their equipment to a friend, claim it as stolen, reap the benefits of insurance, only to have the friend return everything and you now have double what you started with.
Similarly, that scenario is an increasing problem in the corporate business world. They call it “social engineering fraud”. In this case, someone poses as a trusted and reputable source within your own company or as a business partner requests money or goods only to prove that the transaction was fraudulent. This is also a form of voluntary parting due to that person sending money away willingly, rather than forcefully.
Since this is a growing problem with an increasing number of claims, insurance companies are slowly beginning to offer protection against social engineering fraud, but it is very limited. We take our business very seriously and believe this is an inexcusable clause to be held by any insurance company or policy. We are advocating for the awareness of this insurance exclusion and making a change so we can be protected from scams, theft, and other fraudulence. Be share to spread the word and let this issue gain traction and attention from the masses.