Valuable Papers Protection

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Valuable Papers Protection

• Stephen Richards
• President CEO
• Richards Richards
• Nashville, TN

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• Thursday, June 18, 1998 545 p.m.

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What other sources in your office can place your
paper records at risk?
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An Accident in the office such as a workman
hitting a sprinkler head Or
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A fire in another office or on another floor Or
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A coffee pot water line rupturing on Friday
evening Or
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The result of terrorist activity Or
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A tornado, or simply high winds Or . . .
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All of these place your records at risk.
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Common sense must rule.
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What can happen?

• Fire damage
• Smoke damage
• Fire department
• Sprinkler malfunction
• Tornado or other natural disaster
• Facility mishap
• Water overflowing from above from -
• Coffee pot/water fountain line break
• Roof leak
• Roof failure

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Where are Your Records Stored?

• On-site or
• Commercial Records Center
• Mini-warehouse
• Partners basement, attic, shed, barn
• Moving company warehouse
• Commercial warehouse

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Critical Questions

• How are your records insured when they are
• On-site?
• Off-site?
• Is there a difference?

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Critical Questions

• What is your responsibility should there be a
  disaster at the facility where your records are
  stored?
• What if they are destroyed?
• What if they are wet?
• What if they are smoke-damaged?

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Critical Questions

• What is the commercial records storage facilitys
  responsibility
• to you for any type of damaged records?

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• If your records are stored off-site and you are
  paying them to store the records, you must have a
  contract that discusses liability.

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Contract Language

• Depositor declares that the value of any stored
  materials, transported, received, handled, or
  stored hereunder or later received for the
  account of said Depositor shall not exceed 2.00
  per cubic foot.

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Contract Language

• The liability of the Company to Depositor shall
  be limited to damages or loss caused by the
  Companys gross negligence and shall not exceed
  the limits set forth in section xxx.

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Additional insurance may be procured by the
Company, if available, at established rates when
requested in writing by the Depositor.
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. In no way shall the Company be liable for any
consequential or incidental damages. Such
limitation of liability shall apply irrespective
of the cause of loss, damage or destruction.
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Additional Contract Language

• ) The stored materials are placed in storage at
  the exclusive risk of the Depositor for damage
  for fire, leakage, heat, vermin, gradual
  deterioration, acts of God, or the public enemy,
  labor disputes, riots, or any cause beyond the
  direct control of Company.

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• Any claim against Company must be made in writing
  and delivered to Company by registered mail not
  later than the earlier of thirty (30) days
  after return of stored materials to Depositor, or
  thirty (30) days from the date Depositor becomes
  aware of, or should become aware of, a claim
  against the Company.

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• Company shall not be liable for any
  representation, understanding or agreement unless
  in writing and specifically incorporated into
  this Contract.

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Valuable Papers Coverage

• Valuable papers is insured under an inland marine
  form and may be
• 1)      Attached to a Commercial Property Policy
  which is common for companies with large property
  schedules and a multitude of locations, or
• 2)      Underwritten on a separate Commercial
  Inland Marine form as is often the case with
  libraries and schools, or
• 3)      Included by an extension of coverage
  under a commercial business owners policy form
  (BOP) which is often the case with law firms,
  accounting firms, and other offices and small
  businesses. It is in this policy form that the
  coverage provided may be the weakest.

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Valuable Papers Coverage

• One should ask these questions
• Assuming that one has coverage for Valuable
  Papers and Records under one of the three methods
  above, does this coverage extend to records that
  are stored off-site (such as at Richards
  Richards)
• What duty is owed to you as an insured by the
  insurance company in the event of a situation
  where your records are not destroyed but are
  damaged by smoke or water? Does ones commercial
  insurance cover the restoration of documents and
  files?

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Valuable Papers Coverage

• The answers to these questions may vary by
  insurance company adjuster, the size of the
  insureds account to the insurance company, the
  specific language and interpretation of the
  policy (manuscript or ISO form), and the
  diligence of the insurance agent.

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Valuable Papers Coverage

• Valuable Papers and Records Insurance Definition
• as defined in Silverplume
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• Reimburses the insured on an all-risk basis for
  loss or damage to valuable papers or records.
  The coverage includes the cost of replacing or
  reproducing business records that are lost,
  destroyed or damaged from any cause, with very
  few exceptions. Valuable papers and records
  consist of books, papers, films, maps, drawings,
  deeds, abstracts, mortgages, manuscripts, and
  various other documents which are vital to the
  continued operation of a business.

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Valuable Papers Coverage

• The Insurance Essentials Handbook further defines
  valuable papers coverage.
• Most businesses have documents and records that
  are important to the operation of their business.
  If these documents and papers are lost or
  destroyed, they can be very costly to restore or
  replace. Most property insurance, such as the
  Building and Personal Property Coverage Form,
  only pays for replacement of damaged books,
  ledgers, and disks containing this type of
  information. Restoration and retrieval costs
  under the Building and Personal Property Form are
  limited to only 2,500. This limitation can
  cause a severe gap on coverage for many insureds.

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Points to consider regarding Valuable Papers
Insurance

• Reproduction, replacement or cost of research may
  not include the cost of restoration. If
  provided, coverage for restoration may be
  limited. The key to restoration is response
  time.
• There is a distinction between coverage at your
  premises and coverage for storage away from your
  premises, unless the location is specifically
  listed in the policy declarations.
• 3. Extensions of Coverage in a Package Insurance
  Policy are coverage teasers. Coverage has been
  taken away then given back in small restrictive
  amounts. At policy renewal or placement of a new
  program, these extensions remind the agent and
  the insured of the property limitations but the
  challenge is in the subtleties of the wording,
  the restrictions and the amount of insurance.

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Points to consider regarding Valuable Papers and
Records Insurance

•       Does this coverage extend to records that
  are stored off-site
• (such as a commercial records center)?
• Probably not, unless the commercial records
  center is specifically scheduled on your policy
  as a covered location.
• Having said this, there could be some limited
  coverage for away from premises subject to a
  nominal limit of insurance however, make sure
  that away from premises is not restricted to
  temporary relocation.

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•  
• What duty is owed to you as an insured by the
  insurance company in the event of a situation
  where your records are not destroyed but are
  damaged by smoke or water?
• Does ones commercial insurance cover the
  restoration of documents and files?

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• The duty owed is a function of the coverage
  provided going back to the various policy forms
  discussed however.
• Reproduce or replace does not necessarily
  include restoration, particularly if we are
  talking about documents that cant be replaced.

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Four Things you should do!

• Verify that you have Valuable Papers Protection
• Check the limits
• Check the deductible
• Have your insurance agent schedule the premises
  of your off-site records storage location

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Thank you.