I inadvertently approved a check that was post-dated by about 1 week. It was an insurance check that a customer of ours gets once a month in the form of an annuity from an accident settlement. I'm not worried about the check being returned, but, if legal issues were to arise from this, who would be held liable? (ie. the bank for cashing a "non-legal" check OR the insurance company for issuing the check!) Please advise.

Check your state laws. As I recall Texas allows the bank to charge a fee, similar to a stop payment, when a customer notifies them of a post dated check. Otherwise they're fair game.

The insurance company could bounce the check (if payable through) if it learns that the payee dies before the check date. But once it's paid, it's too late for them to return it.

Depending on how the annuity check was captioned, even after final payment, the insurance company might be able to try to collect from you if it can prove the payee was deceased before the check date. Look for language like "Manual payee signature required on or after check date," or "Payee must be living on check date."

Take a deep breath, trust the customer will live on, and resolve not to pre-cash similar checks in the future. The odds of your getting hit here are awfully small.

I was told more than once that it is illegal to even write a post-dated check. Is this true?

Absolutely not true. Urban legend.