Most business checks have one payee: your company. Insurance and settlement checks are the great exception. A claim payment for storm damage, a vehicle loss or a disputed invoice can arrive payable to your business and a lender, and a leasing company — sometimes three names deep. Our business services handle commercial, settlement and insurance checks, and these are the checks where the payee line deserves a slow, careful read before anything else happens.
“And” and “or” are not decoration
When two payees are joined by “and” — “ABC Contracting LLC and Hudson Bank” — every named payee must endorse. When they are joined by “or”, either payee can endorse alone. That one word decides whether you need another organisation’s signature before the check can be negotiated at all.
In practice, a lender or lienholder named with “and” usually must endorse first, and institutions have their own internal processes and timelines for doing so. That step happens before a check casher enters the picture, and it is the most common reason settlement checks sit in a drawer for weeks.
Read for these three things
- Every name on the payee line, in order, including any company, lender or individual you were not expecting.
- The joining word between names — “and” or “or”.
- Any mismatch between the business name on the check and your business’s exact legal name.
Before you visit
If another party still needs to endorse, complete that first. Then call the branch, describe the check — the amount, the payees exactly as written, and who has already endorsed — and ask about acceptance, documentation and the fee for that check. Settlement and insurance checks are individually verified, and a check this specific deserves answers about itself, not about checks in general.
If the second payee is a person, not a company
Joint settlements — after an accident, for example — can name your business alongside an individual. The “and/or” rule works the same way, but a person’s endorsement means that person, with their identification, may need to be part of the process. If the other individual cannot attend with you, ask the branch in advance how their endorsement and identification should be handled for your check, rather than discovering it at the counter.
Bring the fully endorsed check and your identification to the branch you called. Handled in that order, the most complicated check your business receives becomes a routine visit.
The companion guide to checks payable to your business name explains how the payee line works, and branch details are on the locations page.
