Resource Library

Valuable Papers, Records Coverage and Risk Management

Stacks of county mortgage record booksDate: May 2021

Although computers have largely replaced filing cabinets for storing information and record keeping, members still have a need for paper documents in the course of a normal business day. As such, members frequently have questions about coverage for valuable papers and records, such as:

  1. What are valuable papers and records?
  2. How do members protect these documents against loss?
  3. If a member suffers a loss, how can the damaged or lost information be repaired or replaced?
  4. What coverage is provided by the MCIT Coverage Document?

MCIT’s inland marine coverage provides coverage for valuable papers and records. This applies to all scheduled premises, or locations, listed on the MCIT member’s property schedule. The applicable coverage limit is discussed later.

What Are Valuable Papers and Records?

As the term implies, valuable papers and records are printed documents and records that contain information. Examples include books, maps, abstracts, deeds, mortgages and manuscripts. Conversely, a valuable paper/record does not include:

  • property that is stored at sites other than scheduled premises.
  • money.
  • securities.
  • data processing film, tape, disc or other magnetic recording or storage media.
  • property that cannot be replaced with materials of like kind and quality, unless it is a described item.

In addition, the definition of valuable papers does not include property that no longer qualifies as valuable papers and records because it is beyond the prescribed period that a law requires its retention and the retention schedule adopted by the MCIT member.

How Can Members Protect Documents from Loss?

First and foremost, MCIT members should assess the papers and documents stored at each scheduled location to determine the appropriate limit of coverage needed. The largest threat to these documents is damage caused by fire, smoke and water.

Although sprinkler systems offer protection in controlling fire, they expose paper to extensive water damage. Smoke detection systems also offer additional protection. The best way to protect these documents is to store them in fire-resistive cabinets that minimize the exposure to fire, smoke and water.

Another option is to utilize a vault where available. Stored documents should be elevated from the floor’s surface so as to reduce the potential for water and moisture damage.

Members should implement a records protection program in addition to their records retention policy. The program should require an inventory of the records, a policy requiring records to be promptly returned to storage and duplicate records or digital copies to be stored at a secondary location.

How Are Lost or Damaged Documents Repaired or Replaced?

The best way to replace any lost information is to keep copies of all documents at an offsite storage location. Recognizing that this may not be practical, one option is to keep digital copies stored offsite. Another option is to have a recovery plan to reconstruct as much of the information as possible from various other sources within an organization.

In the event of a covered loss, MCIT assesses the damage and likely works with the member and a recovery specialist to coordinate repair or replacement of the covered valuable papers and records. Such specialists provide technical assistance for damage caused by water, moisture and smoke, including freeze drying of documents in an effort to eliminate problems with mold and odor.

What Coverage Does MCIT Provide for Valuable Papers and Records?

MCIT provides counties with $100,000 per occurrence in valuable papers and records coverage with higher limits available if needed. Other MCIT members that elect property coverage receive a minimum of $5,000 per occurrence in coverage with higher limits available.

Valuable papers and records coverage is provided on an occurrence basis, meaning that the coverage limit is the most MCIT will pay for loss in any one occurrence regardless of the number of scheduled locations affected. The listed deductible applies to each loss.

MCIT covers members’ valuable papers and records only when they are on scheduled premises or away from scheduled premises as provided for under Extensions of Coverage in the MCIT Coverage Document.

  1. The extension applies while the property is removed from scheduled premises to a safe place because it is endangered by a covered peril.
  2. The extension also applies while the property is in transit to or from scheduled premises or temporarily at other sites except for storage.

Under the extensions, the coverage limit is the smaller of 10 percent of the total valuable papers and records limit or $5,000. MCIT also covers members’ interest in similar property that belongs to others.

In addition to the general exclusions, coverage does not apply to loss from electrical or magnetic injury disturbance or erasure of electronic recordings or to errors or omissions in processing, duplicating or copying. Loss caused by lightning is covered or if a fire or explosion results, MCIT covers the loss caused by the fire or explosion.

It is important for members to recognize that MCIT’s valuable papers and records coverage does not extend to any antique, rare or historical item, or for more than the actual cost to repair or replace covered valuable papers and records with materials of like kind and quality.

Members who would like additional information or have questions about this topic should contact their MCIT risk management consultant toll-free at 1.866.547.6516.

The information contained in this document is intended for general information purposes only and does not constitute legal or coverage advice on any specific matter.