A forgery or alteration coverage form protects a business against loss when checks, drafts, or similar written instruments are forged or fraudulently altered. It is a commercial crime coverage, not a general liability or property damage form.
In plain terms, it responds to a financial crime involving written payment instruments.
What it is designed to cover
Depending on the form, this coverage commonly focuses on losses involving:
- forged signatures on checks or drafts
- fraudulent alteration of the amount or payee
- covered written instructions that cause the insured to part with money
The exact wording matters because crime forms define covered instruments, exclusions, and proof requirements very carefully.
Why it matters operationally
These claims often involve banks, internal controls, and accounting records. A business may discover the loss only after reconciliation or after a bank rejects or honors the altered item. The insurer will usually look closely at:
- the original instrument
- how the alteration or forgery occurred
- when the loss was discovered
- what controls the business had in place
Related Terms
- Commercial Crime Coverage Form
- Employee Dishonesty Coverage Form
- Securities
- Bankers Blanket Bond
- Blanket Crime Policy
- Money and Securities Broad Form