We recommend that you retain certain policy materials on a permanent basis. You will want to retain your entire policy for at least one year after its normal expiration; however, the majority of your policy may be discarded after two years.
We have observed an increase in litigation regarding claims occurring many years ago, but just presented for settlement now. The difficulty arises out of the so-called “trigger,” that precise moment in time when the claim occurs. Is it the actual date of occurrence? Is it the first time injury becomes known? Is it the date of manufacture or treatment, or the date of the accident or injury which occurs many years later?
To best advise you, we suggest that you make the declarations page of any liability policy (general liability, professional liability, the employer’s liability portion of your worker’s compensation, automobile, etc.) a permanent part of your records retention program. As agents, we are only required to keep files for five years. Furthermore, there is risk that the client may change agents at a future date.
By selecting your policy and retaining just the declarations pages, your permanent file will not occupy excessive space. If you can produce the name of the insurance company, policy number and policy term available, the insurance company will be required to produce a duplicate policy.