Protecting valuable documents and record
The risk of losing valuable documents and records must be taken into account in your insurance policy assessment. This type of insurance is often overlooked by business professionals and owners. Service providers such as accountants, IT consultants, lawyers, notaries and architects are of course especially vulnerable. Just think of the consequences of a fire breaking out at their firm— the loss of documents and records would threaten not only their operations but also their very existence. This article looks at why valuable document coverage is important for all businesses.
What is a valuable document?
Most companies have valuable documents such as contracts, invoices, accounts receivables and databases. Valuable documents also include records, manuscripts, historical documents and architectural plans. All these documents can be covered by your insurer.
Types of coverage
There are generally two types of coverage:
- Valuable papers and records coverage
This covers the cost of finding and replacing documents and records destroyed following a covered loss. If they cannot be replaced, the insurance will cover the value of the lost or destroyed property.
- Accounts receivable coverage
This covers the cost of reconstructing accounts receivable records or collecting amounts the company is unable to collect when its records are destroyed.
In "all risk" insurance contracts, valuable papers and records and accounts receivables are covered by basic insurance. However, in most cases, the coverage amount is insufficient in the event of a major loss.
In addition to taking loss prevention measures, it's also a good idea to protect your valuable documents and records with special coverage. This is essential for important contracts, records and accounts receivables, and when the business's very expertise depends on the creation of documents, as is the case for notaries.
In the event of a loss, the cost of reconstructing or replacing valuable documents or records may be considerable.
Assessing documents to be insured
- We strongly recommend having your valuable documents and records assessed by a professional firm to determine their fair value and avoid any nasty surprises in the event of a loss.
- For documents that cannot be replaced, a professional assessment can help determine a fixed amount that will cover them individually.
- We recommend taking an inventory of your assets at least once every two years to keep their value up to date in the event of a loss.
- To determine the insurance limits for accounts receivables, you can provide your insurer with monthly invoices (to obtain an annual average) or use the total amount invoiced for the previous year.
Document retention and preservation
Certain measures can be taken to reduce the risk of losing valuable documents or records. Retention schedules will vary depending on the document type (legal, tax, social, etc.).
Safes and vaults
- It's important to protect your valuable documents against fire and burglary by keeping them in a place such as a safe or vault. For notary offices, the safe or vault must be climate controlled and able to withstand fire for at least one hour at 927 degrees Celsius.1
- After each use, all documents must be stored in a safe or vault as soon as possible.
- Remember that documents can be damaged by water from sprinkler systems, so it's best to have a dry chemical extinguishing system.
- In addition to freeing up office space and reducing archiving costs, scanning lets you quickly access documents, even from outside the office. It also helps reduce paper handling, which in the long run can contribute to document deterioration.
- All documents can be scanned, but in some cases the original should not be destroyed. It must instead be kept in a safe place, just like scanned documents.
- When scanning is done to do away with paper copies, the transfer from one media to another must be done in accordance with the Act to establish a legal framework for information technology and the Règlement sur la tenue des dossiers et des études des notaires.2
- Companies can scan their documents themselves or call on a subcontractor specialized in the field. Whether you use the services of in-house employees or those of a subcontractor, a confidentiality agreement should typically be signed to protect the sensitive data being scanned. For notary offices, documents must be kept on the premises at all times. If documents must be scanned outside the office, written authorization from Chambre des notaires2 is required.
Before taking these steps, we recommend you first assess your needs, the reasons why scanning is desired and any legal constraints. Document scanning can be a major project, hence the importance of proper planning to achieve the desired benefits.
Backup and archiving
- What is the difference between backup and archiving?
- Backup is used to duplicate scanned documents that can be modified or replaced. It's generally used for short-term needs.
- Archiving is used to store scanned documents for a long period of time, whether for legal, historical or information needs. The archiving period varies depending on the value of scanned documents.
- With today's computer systems, it's easy to copy daily accounts receivables and transfer the data to a second computer at a different location.
- Electronic copies of documents and invoices should be made daily.
- Some conditions must be met to keep documents on computer media:
- Protect access to data with passwords and follow best practices for creating them.
- Maintain a register of people who have access to documents or have made changes to them.
It is equally important to store computer data in your company's safe or vault as it is paper data.
In collaboration with
WILfRID TANGUAy INC.,
Risk Control Services