Agencies have questioned how long they need to retain copies of these insurance policies or coverage documents. Many agencies have a record retention policy for most of their materials of three years after which time the materials are destroyed. It is recommended that insurance policies be kept by the insured forever as documentation of coverage should a question arise. Insurance brokers and agents often do not retain copies of the policies past a seven year period.
Covered liabilities can arise years after an insurance policy has expired.
The statute of limitations is not always an impenetrable shield. If storage space for the original policies is an issue at your agency, microfilming the policies may be an effective alternative. We recommend you check with your agency attorney prior to implementing a microfilming procedure. It was necessary for those agencies to supplement their established program to include instructions on how to file an incident report based on the information contained in Section 3 of the Manual. It is encouraging to see the good start these reporting agencies and facilities have made in establishing effective loss control efforts.