Burand’s Agency E&O Blog: Tip #40

Claims Draft Checks. Not many agencies have claims draft authority any longer, which I consider a positive change relative to what it was 20 years ago. However, a few specific insurance companies continue to believe draft authority is an important competitive advantage resulting in their agencies continuing to have claims draft checks in their office. As this practice has faded, so has understanding the need to protect those checks. Through the years, hundreds of agencies have likely had their claims draft checks stolen, sometimes by their own employees.

These checks should be locked up. The only people who should have the key are those who have the carrier’s authority to sign the checks.