FORGERY OR ALTERATION
Forgery is defined as signing the name of another person or organization to a check, draft, promissory note, or other monetary instruments without the authority to do so and with the intent to deceive. Intent to deceive to secure personal benefit without knowledge or consent is the basic factor for forgery coverage. Someone could sign an instrument without authority or consent, but it was done intentionally and without reason to deceive and that would not fall under an intentional act of forgery.
The insurer will pay you for your direct loss caused by Forgery or alteration of, on or in any written monetary instruments which are:
- made by, drawn by or drawn upon you or which may have been purported to have been made or drawn
- made or drawn by one acting as your agent or which may have been purported to have been made or drawn.
You will be reimbursed for your expenses in the event you are sued for refusing to pay any written covered instrument because the monetary instrument has been forged or altered. Reimbursement of such legal expenses is dependent upon the insurer’s consent to defend against such suit. These legal expenses will be paid in addition to the limit of liability provided for forgery.
A signature which has been reproduced by mechanical or electronic means or one produced by a mechanical check-writing machine or computer printer shall also be treated the same as a handwritten signature. However, an electronic signature which is not a mechanical or electronic reproduction is not included for coverage under forgery.
A substitute check as defined in the Check Clearing for the 21st Century Act will be treated in the same manner as the original check it replaced.