How long do I keep my records?
by Curtis M. Pearsall, CPCU, CPIA
This is a common question. Unfortunately there is no easy answer. A "rule of thumb" calls for a seven year retention, but each state has its own requirements. There are also requirements set out by state insurance departments, insurance carriers, unfair trade and claim practices acts and tax record requirements.
Utica National recommends that agents obtain record retention information from a number of sources, including their attorneys and accountants, insurance departments and carriers. Record retention should also be tailored to the agency lines of business as well as the applicable law.
From an E&O perspective, there is no doubt that records retention is important in making evidence available for an agent’s defense. The documentation supports agency testimony regarding the conversations and transactions involved. Lack of records may be interpreted by a jury as an effort to withhold or conceal unfavorable information. As you will note by the following E&O claim, records retention not only applies to agency information but also information provided by your customers.
There have been other cases dealing with liability policies – particularly old "occurrence" policies. If there is a claim and the old "occurrence" policy can't be found, there may be questions on how the policy was written and whether it would cover a particular claim. This certainly has the potential for a court battle. As noted insurance expert Ron Anderson has stated, "While lawsuits can be won by insureds without producing the actual policy, the availability of a policy can reduce the costs of and, in many cases, eliminate the need for a lawsuit." Good agency practice is to suggest that clients retain at least their liability policies forever.