I would like to state more emphatically what Jim just said.  But first, let me forewarn you that I am a dirty, rotten, stinkin owner of a commercial records center (used to be called, Amy's disclaimer).

 

If you use the services of a commercial records center and you have paper records managed offsite with them, you must notify your insurance company where your records are stored.  As Jim stated, name the commercial records center as "an additional insured" - providing their name and address.  And if you think about it - if an insurance company is insuring your records, they should have the ability to inspect the facility where they are stored.  When we had our fire in 1998, some of our clients had not notified their insurance company that they used our company and the insurance company denied their claim, based on this alone.  This also forces you to use a facility that will meets their standards.

 

With regards to coverage, there will be two types.  The commercial records center, through their contract, will limit their liability to a certain amount per box or per cubic foot - usually around $1.00.  This is normal.  If this is not sufficient for you, you can purchase, through the commercial records center, additional coverage which will be added to the bill each month.  (out of 1900 clients, none of our clients elect to do this.) The most important coverage a records manager will have comes from their own "valuable papers coverage" through your office policy.  You need to know the amount of valuable papers coverage you have (the limits) and the deductible amount.  If you are not comfortable with the amounts stated, you can raise or lower each to the level where you are comfortable.  

 

And, how much do you insure one box for?  If the box contains the signatures of dead people, it will be impossible to place a realistic value on the box.  What if those who signed the document are in several cities - and it requires each to be present to reconstruct, how much will that cost to recreate?  I can give you other situations to think about but you can probably come up with your own.  You cannot insure one box for one amount and another box for a higher amount.  Every box will be insured the same.  The more realistic questions are to think about the possible things that can happen to your records - smoke damage, water damage, fire, being blown away in a tornado or hurricane, etc.  Look at the natural disasters in your local area and disasters in the commercial records management industry in the past twenty years and think about what it might cost to recover your records, should they be involved.  And, don't limit your situations solely to the off-site industry.  What about a coffee pot running in your office above your head for the entire weekend - you arrive to work on Monday to find records in puddles of water everywhere?  A plumbing problem above your floor - a sprinkler mishap in your office with water running for 45 minutes at 150 gallons a minute - (because no one knows where to turn off the riser?)  Wet records in your office.  What does it cost to freeze-dry a cubic foot of documents today?  How much to ozonate a cubic foot of smoke-smelly documents?  Think about all of these things - and then get with the person in your organization responsible for insurance, get with your organization’s insurance agent - and your commercial records center.  

 

If there is a disaster, it is important that the records manager have an answer when the hard questions come their way from above with regards to coverage, liability and restoration.  Your answers may determine whether you are a hero or looking for another job because you had no answers.    

 

  

 

R. Stephen Richards, CSDS

President & CEO

Richards & Richards

Nashville, TN  

 

615-242-9600

 

www.RichardsandRichards.com

 

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-----Original Message-----
From: Jim Booth [mailto:[log in to unmask]] 
Sent: Wednesday, November 28, 2012 2:55 PM
Subject: Re: Insuring your records

 

Hi Sophie - The least expensive approach for insuring records stored offsite is to consult with your current insurance agent to determine whether your valuable papers coverage in your current policy is adequate to cover all records assets stored onsite and offsite. Once you determine that you have a good valuation of records and adequate coverage in your current policy, simply add the commercial records center that is storing some of your information assets as an additional insured under your policy. That serves to notify your insurance carrier that part of your information assets are stored elsewhere and if an incident should occur your insurance carrier can respond appropriately to the claim. 

 

Hope this helps,

 

Jim

 

Jim Booth

Records & Information Management Practice Leader

 

Brightstone Insurance Services, LLC

Direct – 919.323.3266

Direct Fax – 914.636.0802

Main - 877.862.4755 x 3266

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