A client recently asked me the following question:

Do you have a good filing system to recommend for my insurance policies? We keep them, but have never had a good system. This might be in your book that I have not read, but I think I would need something tailored to what I have. With all the policies there is some overlap between personal and business. I am looking for physical ideas (3 ring binders, accordion folders, etc.) and short term and long term storage ideas (how long to keep what policies for example.)

Since I imagine this is a question a few others out there might have, I thought I’d share my response here as well.

Personally, I advocate going digital as much as possible, and encouraging brokers and insurance companies to do the same. As brokers produce paper, ask them to provide digital versions as well. Digitally stored documents are much more accessible, and they can be emailed to anyone involved in the insurance negotiation, management, writing, and renewal processes.

A file naming system/convention for such digital files is helpful for example: coverage-type_source_year.pdf (e.g. liability-2006.pdf, workerscomp-2005.pdf, etc.). You might also consider setting up a file directory structure that organizes records by type of coverage or by source of document.

Also, don’t forget that you need to keep at least 10 years of your liability policies ready to hand to your attorney in the event of construction litigation.

Paper storage comments:

• Make sure no loose paper is in the file, and that everything is attached using a 2-hole punch.
• Make sure that there is one file per policy. Put endorsements on top, as they come in, and place correspondence on the inside jacket of the file.
• Sometimes brokers deliver policies and documents in 3-ring binders. These seem to be very durable, and my only complaint about them is they take up a lot of space, and don’t fit in file cabinet drawers. But people do find them easy to put on a shelf. So if documents arrive that way, I see no problem with storing them as they come.

Better organization of your insurance files will greatly improve your insurance management life and policy renewal cycles, and generally make it much easier for you and your staff to find things when they need them. In the case of paid staff members or hourly consultants who might be dealing with these files, it can also end up saving you money by making their jobs faster and easier.

-Don