An employee altered and cashed a check for $2000. The loss is payable under which insuring agreement?

An employee altered and cashed a check for $2000. The loss is payable under which insuring agreement?

• A. No coverage
• B. Robbery Inside the Premises
• C. Forgery or Alteration
• D. Employee Theft

Answer: (D)

Employee dishonesty, where a worker misappropriates funds, is covered under the Employee Theft insuring agreement. In this scenario, the employee altered and cashed a check, which is a direct act of theft of company funds by someone within the organization. That’s exactly the situation Employee Theft is designed to protect—losses resulting from theft by an employee. Forgery or Alteration would apply if a third party forged or altered a check, not when the act is committed by an employee who cashes the altered instrument. Robbery inside the premises involves taking money by force or threat, which isn’t indicated here. So the loss is payable under Employee Theft.

Employee dishonesty, where a worker misappropriates funds, is covered under the Employee Theft insuring agreement. In this scenario, the employee altered and cashed a check, which is a direct act of theft of company funds by someone within the organization. That’s exactly the situation Employee Theft is designed to protect—losses resulting from theft by an employee. Forgery or Alteration would apply if a third party forged or altered a check, not when the act is committed by an employee who cashes the altered instrument. Robbery inside the premises involves taking money by force or threat, which isn’t indicated here. So the loss is payable under Employee Theft.