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As a business owner, you’ll want to ensure you carry out your business operations the right way. If your business insurance is due to expire or renew, you may be wondering how long you should keep your previous policy records on file. Will you need access to those documents years down the line, or can you throw them away?
The retention period for insurance records varies depending on the type of insurance you have and the industry you operate in. And depending on certain regulations, you can store your insurance records either in paper or electronic format.
Here, we’ll explore how long to keep business insurance records to minimise any risks that can come with parting with them too soon. We’ll also explain best practices for organising and storing your business insurance records, to help keep everything organised and secure.
Why keeping business insurance records is important
Business insurance policies should be kept on file for at least seven years after the policy has expired for paper copies, and at least 10 years for electronic copies.
There are several reasons why keeping your business insurance records on file is important, including:
- Even after your insurance has expired, you should keep your policy records on file in case of later claims
- Insurance records provide proof of cover which can help your business resolve any potential disputes or claims
- Having your expired policies on file can help you secure better insurance rates and coverage in the future, such as cheaper premiums
- By keeping your expired policy documents, you’ll have them to hand should you need to refer back to them – this can help with administrative tasks and future planning
- Records are particularly important if you need to make an insurance claim. If you’re not sure what’s required when making a business insurance claim, be sure to check with your insurance provider so you have everything you need to hand
Record-keeping requirements and regulations
As you’re aware, insurance can come with jargon and legal terms which can feel tricky to get your head around. Here, we’ll explore the recordkeeping requirements and regulations you’ll need to adhere to as a business owner.
According to Section 5 of the Limitation Act 1980, there is a ‘time limit for actions founded on simple contract’, so following a legal issue there is a deadline of six years for action to be taken. A simple contract is an agreement which has been accepted as legally binding by both parties, and this includes insurance policies. This means as a business you have a responsibility to keep these documents to hand for at least six years after their expiration so you can refer to them if a disagreement or legal issue ever arose.
Another record-keeping requirement to be aware of is that of HM Revenue and Customs (HMRC). HMRC makes checks on how businesses keep their records, and will usually contact you by letter if they choose to investigate your business records. This check will initially happen over the phone, but if they decide you’re at risk of keeping inadequate records you may receive a face-to-face visit. If during their visit HMRC find you’ve deliberately destroyed your business records, you could face a fine of up to £3,000 and they may even disqualify you as company director.
With this in mind, keeping your business records will not only make any insurance claims more straightforward, but they’re also important to keep on file if HMRC decides to perform a compliance check on your business.
Best practice for organising and storing insurance records
So, keeping your business insurance records to hand even after they’ve expired sounds like a good idea, right? Here’s how to best organise and store your insurance records.
Keep them secure
Try to keep your business insurance records in a secure and accessible location. A locked filing cabinet for example can ensure only those who have the key can access those important documents.
Create an inventory
It can be worthwhile to create a detailed inventory of all your insurance policies and associated records, particularly if you have various documents that date back several years. For each individual policy, try to write down the name of the insurer, the policy number and the date the policy was issued.
Consider software tools to streamline the process
Want to take the pressure off and ensure all your documents are stored securely? You could use software tools like a file management system, or outsource your insurance record-keeping to a professional service to improve your records management and take some of the worry away.
Protect your business against the unexpected with Protectivity
As a business owner, your business is your pride and joy, so it’s only right you’ll want to secure its future. Protect your business with our small business insurance – get a free quote today.
*Disclaimer – This blog has been created as general information and should not be taken as advice. Make sure you have the correct level of insurance for your requirements and always review policy documentation. Information is factually accurate at the time of publishing but may have become out of date.Â
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