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Hi and welcome,
Two issues can be addressed easily:
The existence of insurance is a practical issue and does not affect the legal considerations/principles.
A lawyer should be retained.
If I understand the parties involved here from your post, the transaction is what we call a bailment and the person in possession is responsible. Example...bring your car into a mechanic..it is stolen...the mechanic is liable. He has a duty to return the item in the same condition or better than when it was taken in.