Illinois Subscriber

A

We are not aware of any such coverage. If an employee of your client were in collusion with the contractor to defraud your client, there could be coverage under an employee dishonesty coverage form. This type of coverage requires, however, that an employee be involved in an incident that causes a loss to the insured and that the incident result in financial benefit to the employee. In the example you presented, an employee was not involved.

Theft, disappearance, and destruction coverage includes an exclusion for “voluntary parting” with property, which appears to have happened in this situation. Your client voluntarily sent the check out, even though it was directed to the wrong contractor. Forgery and alteration coverage requires that the check be forged or altered in order to cash it, and you said this also didn't occur.

The other coverage that might be considered is accountant's professional liability insurance. However, this type of coverage covers damages arising from professional service for others for a fee. It wouldn't be applicable in the case you cited because an internal error affected only the insured. However, if an outside accounting firm working for your client had mis-directed the check, there could be coverage under their accountant's professional liability policy.