3rd Party Insurance for Physical Records
Our company is looking into the need for coverage through our general liability policy that would address valuable papers stored off site. It evokes the question of how do we determine the true value? This is a tough one as I can invision the stakeholders believing they are worth more and others thinking they are not worth much at all. Does anyone have any pointers?
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Comment by Peter Kurilecz on March 15, 2010 at 11:35am -
you may want to check out the litigation that took place after the Diversified Records Storage fire in Pa. The plaintiffs were each awarded over $20 million for the loss of their records. The value of the boxed records varied from a high of $10K to a few hundred dollars. The value was based upon what it would take to recreate the records. The Attorneys did a presentation on the case at the Boston ARMA Conference
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Comment by Randy Moeller on February 17, 2010 at 11:35am -
Cheryl,
One secret, many companies do not place much of a value on most records stored with a vendor. Many will be compensated $2-4 per box by the vendor if destroyed accidentally (e.g. fire) depending on contract terms. This is often done because the small amount of high value records should not exist as one copy only, in case of disaster. Whether another hard copy or microfilm etc. is used, they should reside at a different location. This is what we do with our lab notebooks and it has been a benefit to us a number of times.
If for some reason only one copy can exist, then the value should equal the loss the company would incur. Think of a patent on a product. The value of the records that defend the patent is equal to the loss of sales if the patent was lost (due to the records being lost). If product sales were expected to generate 5M in revenue then the records are worth 5M as they are protecting that revenue. Hope that makes sense.
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