WAREHOUSE LOSS EXPOSED: HOW A $3.2M CLAIM COLLAPSED UNDER SCRUTINY
A missing shipment, contradictory accounts, and security failures - why this high-value insurance claim never stacked up.
QNA Investigations was engaged by the insurer’s legal representatives to conduct enquiries into a claim involving the alleged theft of custom-made construction materials from a Sydney warehouse. The claim valued the missing goods at more than $3.2 million.
Our investigation revealed not only the difficulty of verifying the loss, but also the risks that arise when contracts, security measures, and record-keeping fall short. Ultimately, the evidence gathered enabled the insurer to deny the claim, preventing a substantial payout on the basis that the loss could not be substantiated.
THE CLAIM
The insured: A logistics and warehousing company operating a large distribution facility.
The client property: Bespoke aluminium façade components belonging to one of the insured’s customers.
The loss: Reported theft of the goods, allegedly worth $3.2 million, during a broad period of time.
The issue: No consistent records or clear evidence that the materials ever existed, were delivered, or were stored securely at the warehouse.
OUR INVESTIGATION
Acting on behalf of the insurer’s lawyers, we carried out comprehensive enquiries, including:
Reviewing police reports, insurance documents, and correspondence.
Conducting on-site inspections of the warehouse.
Interviewing directors, managers, warehouse staff, truck drivers and forklift drivers.
Analysing financial records, invoices, and metadata attached to documents provided after the claim.
Despite extensive efforts, the investigation was hampered by:
Contradictory statements from employees about the existence, storage, and last known sighting of the goods.
A lack of contracts between the warehousing company and its client regarding storage of the materials.
Security failures, including non-functioning CCTV cameras and a site left open and accessible at all times.
Documentation gaps, with records either missing, inconsistent, or created well after the alleged loss.
KEY FINDINGS
Unclear existence of goods: Employees could not consistently describe the number, weight, dimensions, or even the colour of the missing items. Some conceded they may never have seen the goods at all.
Timeline confusion: The reported “loss window” varied dramatically - from two weeks to nearly five months.
Questionable documentation: Invoices provided to substantiate the claim were created after the alleged loss, with figures revised upwards multiple times. Supporting documents lacked explanatory notes and, in some cases, metadata had been removed.
Security failures: The warehouse lacked functioning security measures. Cameras were fake, broken, or livestream only; external gates were never locked.
Potential alternative explanations: Some employees suggested the goods could have been misplaced, delivered to the wrong site, or mis-loaded - rather than stolen.
OUTCOME
Because of the contradictions, poor security, and lack of evidence, the insurer had clear grounds to deny the $3.2 million claim. Without verifiable proof of the goods’ existence or loss, the matter could not meet the evidentiary standard required to justify such a significant payout.
This outcome demonstrates how detailed, independent investigations can provide insurers and their legal teams with the confidence to challenge unsubstantiated claims - and safeguard against multimillion-dollar losses.
LESSONS FOR BUSINESSES
This case illustrates several important lessons:
Contracts matter: Formal agreements between parties protect against uncertainty when losses occur.
Record-keeping is critical: Delivery receipts, photographs, and chain-of-custody documentation are indispensable when high-value goods are at stake.
Security cannot be an afterthought: Warehouses storing client property must have effective, verifiable security measures in place.
Consistency builds credibility: Contradictory accounts and delayed documentation undermine claims and can raise suspicions of fraud.
OUR ROLE
At QNA Investigations, our role is not to assume but to test the evidence. In this case, the absence of consistent records, conflicting testimony, and inadequate security measures meant the insurer’s lawyers could advise their client with confidence: the claim did not hold.
For insurers, law firms, and businesses, the lesson is clear: when multimillion-dollar sums are at stake, robust processes are your best protection - and when things go wrong, experienced investigators are essential.
NEED CLARITY IN A COMPLEX MATTER?
At QNA Investigations, we deliver facts, not assumptions - helping a wide range of clients uncover the truth with precision and integrity. If you’d like to know more, contact us by phone on +61 2 9212 5000 or via email at mail@qnainvestigations.com.au.