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Files Defiled

Protection for documents worth more than the paper they're printed on

Take a look around your office, and consider the documents that are critical to your operation. What would it cost you in time and money if they were damaged, destroyed or stolen? The recovery process will be a lot easier if you have valuable papers and records insurance, which pays the cost of recreating documents lost due to a covered peril, such as fire and flood, says attorney Ronald S. Hodges, director of litigation for law firm Marshack Shulman Hodges & Bastian LLP in Irvine, California.

Chances are, you already have some document coverage under your commercial property or business package policy, but Hodges recommends you perform a careful risk evaluation and increase your limits if necessary. "It's very inexpensive coverage for a great deal of peace of mind," he says, adding that recreating paper files and even electronic documents can be cost-prohibitive. For example, one of Hodges' clients spent $9,000 recreating documents and recovering electronic data that suffered water damage after a fire in the office on the floor above. And no matter how careful you are about making backups and storing papers safely, it's virtually impossible to totally protect everything.

Insurance companies typically define valuable papers and records as the books, papers, films, maps, drawings, deeds, abstracts, mortgages, manuscripts and various other documents that are vital to a business's continued operation. These documents may belong to you or to your customers. Some policies cover electronic documents, so if electronic data is crucial to your operation, be sure to add it to your policy.



Jacquelyn Lynn is a freelance business writer in Orlando, Florida.

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This article was originally published in the August 2001 print edition of Entrepreneur with the headline: Files Defiled.

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