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Files Defiled

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

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This story appears in the August 2001 issue of Entrepreneur. Subscribe »

Take a look around your office, and consider the documents thatare critical to your operation. What would it cost you in time andmoney if they were damaged, destroyed or stolen? The recoveryprocess will be a lot easier if you have valuable papers andrecords insurance, which pays the cost of recreating documents lostdue to a covered peril, such as fire and flood, says attorneyRonald S. Hodges, director of litigation for law firm MarshackShulman Hodges & Bastian LLP in Irvine, California.

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

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