Forgery and alteration endorsement allows coverage despite false pretense exclusion in the main policy.

The plaintiff/insured, a law firm, was the victim of a scam resulting in a $176,750 loss. The insured accepted what appeared to be a cashier's check for a down payment for services. It was later learned the check was "altered/fictitious" and "counterfeit." The insured filed a claim with its insurer, which was denied pursuant to the main policy's False Pretense exclusion. The policy, however, contains a Forgery and Alteration Endorsement, which would provide coverage. The court found that, because the language of the policy was ambiguous in the context of the Forgery and Alteration Endorsement, and the False Pretense Exclusion being read in tandem, the contract should be interpreted in favor of the insured.

Case Law Alerts, 3rd Quarter 2013