WHAT IS 'Valuable Papers Insurance'

Valuable papers insurance is a special type of property-casualty insurance. Valuable papers insurance will reimburse the policyholder for the monetary value of any valuable papers such as wills, trusts or corporate charters, that are lost for any reason. It is often purchased by corporations, small businesses and wealthy people.

BREAKING DOWN 'Valuable Papers Insurance'

Valuable papers insurance protects businesses from the expensive and often time-consuming process of replacing important documents. The coverage limits for valuable papers insurance can be very high in some cases, however, the coverage is always limited to either the actual monetary value of the papers themselves or their replacement value. Furthermore, the papers insured must always be carefully guarded in an appropriate fashion in order to file a claim.

If a business’s commercial property policy does not include valuable papers, those items can be insured by an endorsement, which generally provides the same, or in some cases broader, coverage than is included in a typical property-casualty insurance policy.

For example, let’s say a company’s headquarters is destroyed in a flood. The company’s share certificates, documents related to a court case the company was once involved in, as well as information related to personnel and other important papers were all destroyed in the flood.

This company has valuable papers insurance, so it files a claim and is reimbursed for these documents, thus saving the company money as well as time and effort involved in reconstructing the evidence from the court case. Medical and legal records are often the toughest to reproduce, as well as documents related to research and development.

What Isn’t Covered

Most insurance policies for valuable papers specifically state the exclusion of documents stored electronically. Even though many businesses keep a wealth of important records in electronic form, few property policies provide coverage for damage to electronic data. However businesses can protect this information with coverage specifically for electronic documents.

Despite the fact that most businesses today store a great deal of information electronically, 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. Often times critical documents can't be replaced at all.

Valuable papers insurance is used mostly by businesses, but individuals can also acquire coverage. Insurers often require the policyholder to make efforts to protect valuable papers by putting them in a safe, for example, in order to receive compensation if they are destroyed

RELATED TERMS
  1. Paper Trade

    The paper trade is the practice of simulated trading so that ...
  2. Tax-Exempt Commercial Paper

    A tax-exempt commercial paper is an unsecured short-term loan ...
  3. Backup Line

    A backup line of credit is used by a bank to cover any issue ...
  4. Paper Industry ETF

    An exchange-traded fund that invests primarily in manufacturers ...
  5. Insurance Premium

    An insurance premium is the amount of money that an individual ...
  6. Experience Refund

    Experience refund is the portion of an insurance company’s premiums ...
Related Articles
  1. Managing Wealth

    6 Insurance Policies That Protect the Wealthy

    Here are six types of insurance that the wealthy use to protect their assets.
  2. Financial Advisor

    Mutual Vs. Publically Traded Insurance Companies

    Should you buy your insurance policy from a mutual or publically traded insurance company?
  3. Insurance

    How to Protect Your Income No Matter What

    What does it mean to insure your income? Here are a variety of ways to do it and some insights into when it might make sense to invest in income insurance.
  4. Insurance

    Homeowner's Insurance Guide: A Beginner's Overview

    Everything new homeowners need to know about homeowner's insurance to protect their residence.
  5. Managing Wealth

    The Best Way to Insure Your Jewelry

    What you need to know to keep those baubles, bangles and beads safe.
  6. Financial Advisor

    Life Insurance Replacement: Rules, Laws & Regulations

    When replacing a life insurance policy, a lot can go wrong for the consumer. Find out how life insurance replacements are regulated by the states.
  7. Insurance

    Understanding Taxes on Life Insurance Premiums

    Learn about the tax implications of life insurance premiums, including when they might be taxable and whether they are tax deductible.
  8. Insurance

    Bundle Your Insurance for Big Savings

    Bundling your insurance can save you money and time. Read on to see how to get the most out of multi-line insurance discounts.
  9. Insurance

    Examples of Adverse Selection in the Insurance Industry

    Find out what the term "adverse selection" refers to in the insurance industry, and learn how insurance companies protect themselves from adverse selection.
RELATED FAQS
  1. Can my insurance company refuse me coverage?

    Insurance isn't always as straightforward as other products, and insurers can deny coverage in many different instances. Read Answer >>
  2. What are some examples of when insurance bundling is a bad idea?

    Learn about situations where insurance bundling may not be a favorable option. Bundling insurance is often a good idea, but ... Read Answer >>
Hot Definitions
  1. Enterprise Value (EV)

    Enterprise Value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market ...
  2. Relative Strength Index - RSI

    Relative Strength Indicator (RSI) is a technical momentum indicator that compares the magnitude of recent gains to recent ...
  3. Dividend

    A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
  4. Inventory Turnover

    Inventory turnover is a ratio showing how many times a company has sold and replaces inventory over a period.
  5. Watchlist

    A watchlist is list of securities being monitored for potential trading or investing opportunities.
  6. Hedge Fund

    A hedge fund is an aggressively managed portfolio of investments that uses leveraged, long, short and derivative positions.
Trading Center