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"Smile, you're on candid camera" could be a warning for anyone considering filing a bogus general liability claim against Harrah's Entertainment Inc.
An extensive network of cameras throughout Harrah's properties helps foil fraudulent damage or injury claims, despite some creative attempts.
One man claimed a snake came up through a casino toilet and bit him in "his private parts," said Lance J. Ewing, vp-risk management for Harrah's. There was a snake in the toilet. But a casino camera showed the man carrying the snake in a burlap bag into the bathroom.
And his story didn't add up, Mr. Ewing said. The snake was not indigenous to the region and couldn't have survived traveling through the casino's sewer system. That incident happened a few years ago at a property belonging to Caesars Entertainment Inc., which Harrah's acquired in 2005.
Cameras trained on gaming tables to deter dishonesty or theft are also effective in defending against insurance claims, casino risk managers say.
Most often, Harrah's cameras help when guests allege their cars suffered damage in a casino parking lot or while a valet parked them, said Roger Davis, director of claim management for Harrah's risk management department.
Cameras record drivers arriving and leaving Harrah's premises.
"A lot of times we have to show them that video to convince them we knew about that dent before they got here," Mr. Davis said.
"Photographs tend to jog their memories into the truthful range," Mr. Ewing added.
Other companies face their share of "valet claims," Mr. Davis said. But occasionally some guests believe their casino expenditures justify payments from Harrah's, even though their car dent happened elsewhere.
"That is their justificationÖthey say, 'I spend a lot of money on your property and I have never asked for anything,"' Mr. Davis explained.
Automobile valet claims are among the most frequent general liability losses Harrah's faces, Mr. Davis said. When the claims are legitimate, the company pays them. But Harrah's risk management department takes an aggressive stance when it doesn't have liability.
"If we did something wrong, we want to pay it and settle the claim," Mr. Davis said. "If not, we don't want to pay it, so we take a hard line. We defend a lot of cases and we try a lot of cases and we deny a lot of claims, but we pay a lot of claims," too.
Harrah's closes about 8,000 general liability claims each year, Mr. Davis said. Of those 8,000 claims, valet accounts for about 40%.
Other claims Harrah's defends against include a few stemming from its restaurant operations. Although infrequent, some guests have complained of illness after eating certain meals.
Harrah's then considers how many of the same meals it served on that day. If it finds it served 1,500 of the same dishes and only one guest complained of illness, then "in the absence of medical evidence to support that, we are not paying the claim," Mr. Davis said.
A slip-and-fall claim is also likely to be denied, if a camera shows the guest was inebriated and acting recklessly while wearing flip-flops, for example.
But before Harrah's risk management department denies a claim, it notifies the company's local managers of the property where the incident allegedly occurred.
If the guest is a frequent visitor who spends freely at the property, the local managers can decide whether they want to provide compensation other than a claim payment, such as complimentary room stays, which could discourage them to drop claims.
That is a business decision that doesn't impact Harrah's claims history, Mr. Ewing noted.