After the loss occurred, AIG paid up to the policy limit of $2,500,000.00 under the fraudulent payments policy, recognizing that Baird’s losses had been compensated. However, Chubb denied the report, claiming that White Lake “did not have a contract with Baird to provide goods and services” and was therefore not a “supplier requester” as required by the policy, and that there was no “fraudulent order.” Baird responded that as a financial institution, the commodities it trades are financial instruments and the services it provides are also financial instruments, and believes Chubb’s denial makes its insurance coverage meaningless to its business.
