November 7, 2010

The insured signed a merchant service agreement with ABC, Inc. for check verification and check conversion services. A processing terminal belonging to ABC was installed in the insured premises and every time a client paid with a check, the check was electronically verified using the equipment against a database. Using the equipment the data from the paper check was scanned at the point of sale then processed electronically in a manner similar to that of a credit card. The paper check is voided and handed back to the consumer.

Under the merchant service agreement ABC, Inc. agreed to transfer the funds to the insured account no later than the 3rd business day. A couple of years later the insured began to notice some discrepancies and errors in the amount of money transferred by ABC, Inc to the insured account. According to our insured ABC, Inc. owned them approximately $60,000.

The insured has the following coverage: Theft, Disappearance, and Destruction Coverage Form, CR 00 04 10 90.

This premium content is locked for FC&S Coverage Interpretation Subscribers

Enjoy unlimited access to the trusted solution for successful interpretation and analyses of complex insurance policies.

  • Quality content from industry experts with over 60 years insurance experience, combined
  • Customizable alerts of changes in relevant policies and trends
  • Search and navigate Q&As to find answers to your specific questions
  • Filter by article, discussion, analysis and more to find the exact information you’re looking for
  • Continually updated to bring you the latest reports, trending topics, and coverage analysis