A Perth businessman who was jailed for seven years after attempting a major insurance scam has paid Chubb $500,000.

Hossean Pourzand, 65, pleaded guilty to arson and attempted fraud after arranging for an accomplice to torch a Welshpool factory he owned.

The WA Supreme Court heard Pourzand did not have enough money to refit the building, so planned an insurance swindle instead.

In February 2017 he took out a $20 million policy with Chubb Insurance Australia.

Weeks later, on March 14, an accomplice set fire to the property in return for promises of payment.

The court heard significant damage was caused, rendering the building “unstable, unusable, and likely to be demolished”.

The following day Pourzand made a claim on the policy through his broker.

Police investigations and CCTV footage quickly led to the accomplice, who had secretly recorded his discussions with Pourzand.

In October 2017 Pourzand pleaded guilty, but a dispute over facts delayed sentencing.

The claim was never paid, but Chubb did spend $500,000 on security, assessments and related costs. This has since been reimbursed by Pourzand.

Justice Stephen Hall said the offence involved detailed planning and the motive was financial gain.

“Your family company was the owner of the building, and the beneficiary of the insurance policy,” he said. “You wanted to cause damage in order to make a false insurance claim.”

He jailed Pourzand for six years for the arson offence, and one year and four months for the attempted fraud, making a total of seven years and four months.

He will be eligible for parole in five years and four months.

“The fraudulent insurance claim was not paid out, but the potential impact of fraudulent claims is that the cost of premiums increase and insurance may be more difficult to obtain for everyone,” Justice Hall said.

Insurance Council of Australia spokesman Campbell Fuller told insuranceNEWS.com.au fraud costs the industry at least $2.2 billion a year, “which directly affects premiums for all insurance policyholders”.

“The Insurance Fraud Bureau of Australia works with state police services to help identify fraud cases for investigation and prosecution,” he said.

Chubb was contacted by insuranceNEWS.com.au, but declined to comment.