Whether you keep your old insurance policies tucked away in alphabetical order in a filing cabinet or have lost them all together, there is always a chance they hold some sort of value to you, your business, and your future. From life insurance policies to industrial property insurance policies, the plans of yesterday can impact your future. In some cases, it could mean the difference of having a project financed or not. In other cases, it could mean losing out on the money you thought you were owed. Insurance policies hold their value much longer than you may think. As insurance archeologists, it’s our job to dig those old policies up and examine them.
Statutes of Limitation on Liability
Often times, insurance records remain relevant for much longer than you might imagine, which can lead to financial gains. One of the reasons your old insurance policies still hold value is that there simply is no statute of limitation on liability. What exactly does that mean? It means that an insurance provider is responsible for any damage that took place during the coverage periods, if the damage was covered by the policy, no matter when it is being claimed.
For example, when it comes to commercial general liability insurance, if the damage occurred during the policy years, then the policy provider is responsible for the claim. However, the good news for you is that since there was a policy and the policy covers the damage, the policy provider must cover the claim no matter what. Most forms of general liability insurance have no specific expiration date–making those old insurance documents more valuable than you could possibly imagine.
What’s in a rule?
As a standard rule in the insurance world, the older an insurance policy is, the less restrictive and valuable it is likely to be. Returning to the example of commercial general liability insurance above, if the policy was issued before 1970, it will likely not contain any pollution exclusions, which means that during the valid policy years, the policy holder may not be liable for pollution damage that took place during those years. Instead, the insurance provider may be held liable for the damages
As time moved forward, these pollution exclusions became tighter and tighter. By 1985, commercial general liability insurance policies contained the absolute pollution exclusion language, making the terms of the policy far less ambiguous and much easier to enforce. The impact of the absolute pollution exclusion , in the case of commercial general liability coverage, is increased value in older insurance policies in regards to third party property damage.
Beyond Soil and Groundwater Pollution Claims
Soil and groundwater contamination is a common claim made against general liability insurance policies; however, it is not the only type of claim that can leverage old insurance coverage. In fact, multiple forms of liability claimshave seen a rise over the years:
- Asbestos Liability: Companies have gone bankrupt fighting the various asbestos liability cases. From apartments to office buildings, people were exposed to asbestos on a daily basis. The companies being held reliable for that exposure are expected to be feeling the repercussions until 2049. However, companies that may be threatened by multiple claims have the ability to dig into their insurance policies to find where they were covered and where they were not, thus protecting themselves with their old policies.
- CCA Liability: While many of the asbestos cases have been brought to fruition already, CCA litigation is still building steam. CCA stands for chromated copper arsenate, which was used in the process of pressure-treating wood. The issue is that arsenic can actually leak out of the wood used for various projects. Fortunately for some companies, turning to their old insurance policies to find coverage from the class action lawsuits being filed by homeowners and concerned citizens who came into contact with the treated wood. In some cases, older insurance policies may prove to protect the manufactures and distributors of CCA treated wood.
- Construction Defect Liability: Failure of construction to hold up as designed or as anticipated because of a faulty design, poor workmanship, subpar building materials, and geological failures. A builder’s liability policy will help to protect both the construction company and property owners if such failures were to arise.
So, the next time you’re cleaning out the filing cabinet, don’t be in a hurry to throw away old insurance policy papers and forms you might find. It’s imperative to keep in mind that at one point in time, all insurance forms were hard copies, meaning there is only a paper trail to follow. If you need those forms in the future, it can be difficult to trace them back to you or to prove that you had the coverage you need.
Insurance forms, no matter how outdated can be a saving grace for any business or organization.
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This blog is not meant to represent a legal opinion. Restorical is not a law firm and is unable to provide legal advice.