I know in general that when there is an insurance claim that is paid, in the US, the insured object belongs to the insurance company. So if I accept a check for a totaled automobile then the insurance company takes it and hauls it away, where it is probably stripped, sold for scrap or sold to someone who is willing to repair and re-title it. If something is lost, a claim is paid, and then it is found then the insurance company owns the original object. Given that the missing object is a check which probably cannot be cashed by the insurer (in this case, UPS) I can understand seeking out some kind of legally binding understanding that if the check is found, it will be endorsed over to the insurer or cashed and paid to the insurer. What I don't get is why UPS doesn't have lawyers good enough to write a binding agreement (as part of paying the claim) that does not require collateral.