What Insurance Covers Forged Checks?

Forgery or alteration coverage is a specific type of crime protection. A Travelers specimen covers direct loss caused by forgery or alteration of certain written covered instruments made by, drawn by, or drawn on the insured or its agent. It also describes limited legal-defense expense reimbursement if the insured is sued for refusing to pay an instrument alleged to be forged. This is specimen wording and does not establish what another insurer’s policy covers.

A counterfeit paper check, an altered payee, a forged signature, and an electronic payment instruction may not all fall under the same definition. The specimen expressly distinguishes an electronic signature from a mechanical reproduction of a handwritten signature in one personal-accounts provision, illustrating how terminology can affect a claim. Bank reimbursement rules and insurance coverage are separate processes, so notify the bank promptly as well as following policy notice terms.

Check which accounts and instruments are covered, whether the agreement is included in the declarations, proof and timing requirements, employee or authorized-user exclusions, and the applicable sublimit. Ask whether the quoted form addresses counterfeit checks, altered checks, ACH transactions, and forged wire instructions individually.