Written by Kristen Brown, Insurance Archeologist, PolicyFind

It’s 2016 and technology is everywhere.  I have a chip in my debit card, a watch that makes phone calls and I watch television through a device called “Roku”.  But, as an Insurance Archeologist, my work life is spent looking for a paper trail.

I spend hours searching for insurance policies.  Specifically, I look for policies that can cover environmental contamination costs.

As you will read in other blogs on this site, if you are a business owner who purchased Comprehensive General Liability insurance for your business before policies contained absolute pollution exclusion language, you are likely to have insurance coverage that can address environmental contamination.

So often, people who have owned or operated dry cleaning facilities are faced with the daunting task of having to pay hundreds of thousands of dollars for environmental investigations and clean ups.

As an example, let’s talk about a now-retired dry cleaner named John.

John is contacted by his state environmental agency.  The agency says there is soil and groundwater contamination at the site where he formerly operated a dry cleaning plant.

John’s attorney tells him costs to clean the contamination could be hefty and John needs to track down his decades-old insurance for the shop he operated from 1970 to 1986.  John knows if he can’t find his old insurance information, he’ll have to pay a lot of money he doesn’t have.  Worse yet, the burden of paying the cleanup costs could eliminate any inheritance he has to pass on to his children if he can’t find his insurance.

The first place John looks is in a box full of loose papers in his basement.  He finds some invoices and old bills, but no insurance information.

When John calls his former insurance agency, the voice on the other end of the line tells him his agent has retired.  Further, a check of their computer system shows John’s information from 1986 is too old to have been scanned into their system digitally.  It turns out the agency only scanned from 1995 to the present year into their system. Finally, the agency tells John they kept paper records, but a flood in their storage area in 1998 destroyed all their pre-1995 client files.

Out of ideas, John calls his attorney with the bad news.  It’s at this point he learns he can hire an Insurance Archeologist to help him find his insurance.

And the rest, as they say, is history.

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While technology has improved many facets of our lives, it has also created a bit of a ‘hiccup’ in document retention practices.

Most companies, including insurance agencies, attempted to digitize their clients’ sensitive files some years ago. However, many companies did not have the manpower or hours to invest in scanning all of their client files into databases.  So a cutoff date was chosen, quite randomly in some cases, for digitizing records. Only records that were created after the selected date were digitized, and the records that were created prior to the date were kept as hard-copy.

Even worse, a lot of insurance agencies did not perceive old policies as valuable, so they destroyed expired policies.

The moral of John’s all-too-common story is that personal document retention is just as important today as it was 30 or 40 years ago in order to protect yourself and your interests.  Today, thanks to cheap (often free) digital storage, John has numerous retention avenues from which to choose.

If you are a business owner and are thinking of freeing up some square footage by throwing away some old documents, I urge you to do some online research first.  A quick search engine query will provide several reasonably-priced, cloud, web-based or software options for capturing and storing valuable documents.

Whether you choose to keep all of your important business records in a cool, dry safe place or you select business records management software, proper paperwork retention practices could save you and your family hundreds of thousands of dollars.

Just as health experts say the best exercise is the one you’ll do, any business record preservation method you choose will be the right one, as long as you stay consistent and purge wisely.