A construction company is suing its insurer over what it claims is a computer error that resulted in the company paying $1.9 million to the wrong supplier.
Gracom Masonry is a subsidiary of the Gracom Group. On April 24, 2012, the Gracom Group alleges that it processed an invoice for $1.9 million to be paid to Gracom Masonry. Because the invoice number was entered into Gracom’s computer system incorrectly, the payment went to Tru-Wal Interiors instead.
“Tru-Wal has refused or neglected to return the funds to Gracom, despite demand,” the suit states.
The Gracom Group says that the scenario should have been covered by its insurance provider, the Guarantee Company of North America, under a “crime shield” policy that covers computer fraud.
In a response, the Guarantee Company claims that Gracom reported the loss to the insurer on January 18, 2013, and described the error as an error by its accounting department.
“On April 25, 2012, the accounting department of Gracom incorrectly paid the vendor Tru-Wal Interiors $1,904,082.14. The mistake was only discovered on December 28, 2012 during an audit,” the Guarantee Company alleges Gracom reported.
The Guarantee Company claims that accounting errors are not covered by the insurance policy; rather, only computer and transfer fraud is covered. In its response, the Guarantee Company alleges that Gracom is also suing Tru-Wal Interiors to recover the money.
None of the allegations has been proven in court.
