Valuable Papers Insurance
What it is:
Valuable papers insurance is a kind of property insurance that protects documents such as wills, share certificates, or other crucial paper items.
How it works/Example:
Let's say Company XYZ's headquarters burns down. Inside were the company's share certificates, original copies of the corporate charter, important documents related to personnel, a court case it was involved in, and other important documents that were proof of various things.
Company XYZ has valuable papers insurance, so it files a claim and is reimbursed for the value of these documents. Though they are just pieces of paper, the time and effort involved in reconstructing the evidence in the court case, reproducing all the share certificates, and replacing myriad other critical documentation lost in the fire will cost hundreds of thousands of dollars' worth of time.
Medical and legal records are often the toughest to reproduce, as are documents related to research and development.
Why it matters:
In this age of technology, most information and records are electronic, but original documents are still important. Valuable papers insurance can be helpful in compensating companies for the time spent reproducing lost documents, but it cannot actually replace those documents. Sometimes crucial documents can't be replaced at all.
Valuable papers insurance is mostly for businesses, though individuals can also acquire coverage. Insurers often require the insured to guard the papers (put them in a safe, for example) in order to receive compensation if they are destroyed.