Two insurers paid out more than $1 million on a fraud claim. Now they want Bank of America to cover it.
Arch Insurance Company and At-Bay Specialty Insurance Company sued Bank of America in New Jersey federal court on July 1, 2026, seeking to recover $1,036,424.06 they say they paid after what they describe as fraudulent transfers left their insured's accounts.
The insured, Blue Logistics Topco and its subsidiary G and B Packing Company, both based in New Jersey, was covered "against fraud" under two policies. After the loss, Arch paid $938,237.59 and At-Bay paid $98,186.47. Having settled the claim, both insurers are now subrogated to the insured's rights - stepping into its shoes to pursue whoever they say caused the loss.
The complaint lays out this sequence. On or about July 1, 2025, the company's accounting manager took a call from someone who said he was from the bank and was trying to start a wire transfer for a company executive. The manager said no such transfer was authorized. He was told it would be reported as fraud, and the call ended.
The next day, the filing says, fraud alerts fired on the accounts. Employees flagged each transaction as fraudulent through the bank's "GPO Alert Management System." Even so, the complaint alleges, wire transfers and several ACH batches cleared anyway. The insured called the bank's fraud department to ask why the transactions had gone through. In all, the complaint says, more than $1,000,000.00 was removed from the accounts.
The complaint's core allegation is that the bank processed the transfers after the insured had already flagged them as fraud.
The insurers bring thirteen counts. Several rely on the federal Electronic Fund Transfer Act, along with New Jersey's commercial code on payment orders and common-law claims including negligence and breach of fiduciary duty. The complaint says the bank failed to follow "commercially reasonable security procedures." The insurers want the money back, plus fees and interest.
None of the allegations are proven, and no court has ruled.
