Wow, this has me baffled. Why would someone want to increase their spending and withdrawal limit on a business ATM card tied to a business checking to $10,000.00. Isn't this a huge risk for them should the card be lost or stolen or misused by an employee? And since we have a zero liability through MC for unathorized transactions-this would be a huge risk for us. Can we make this customer sign a hold harmless agreement if they insist on this limit?

Well they're only covered by MasterCard/Visa's zero liability if they meet certain criteria. A business card has additional criteria.

This is a "business" decision - to grant that. My former employer would allow a bank officer to temporarily raise the customer's limit for a specific purpose, but overall limits were set much lower than $10K.