Professional Liability Insurance

October 01 , 2009 in SecurShred in the News

Records found in dumpster

SecurShred has purchased and maintained Professional Liability insurance or Errors & Ommisions coverage that is specific to the information destruction industry. This insurance coverage has been reviewed and approved by the National Association for Information Destruction (NAID). Although this coverage is not mandatory to be NAID certified, SecurShred has chosen to purchase this policy.

Odds are, if you’re a professional, one day you’ll be sued. Lawsuits against professionals are becoming more common, and client expectations of performance are greater than ever. Professionals are judged accountable for errors and omissions that others may not. That’s because civil courts hold professionals to a higher standard of performance, one that is “duty-bound.”

Professional organizations have been severely affected because they were not protected from suits claiming economic loss due to professional negligence. Professionals in firms of all sizes, from sole proprietors to mid and large, are at risk.

Document Destruction Services coverage is designed specifically for NAID Members. See the below scenarios for coverage examples:

Scenario 1
During his route, a truck driver of the ABC Mobile Shredding removes from a secured container a computer printout that contains a shredding client’s customer list, including those customers’ personal private information. The driver then sells that list to someone who intends to use it to commit identity theft. The details of the conspiracy, including the name of the client and the involvement of the ABC’s driver, are established during an investigation of the identity theft ring. The client is sued by their customers for breaching their confidentiality and damaging their credit ratings.

The client sues ABC Shredding based upon the involvement of their driver in the conspiracy.

Scenario 2
XYZ Data Destruction’s truck is hit by a train while transporting documents from War Memorial Hospital to the shredding plant. A few documents are missed during the cleanup. Someone finds them a few days later and returns them to a patient whose name is on the records. The patient knows his rights have been violated (per HIPAA) because of some paperwork the hospital gave him while he was there. He contacts the U.S. Office of Civil Rights who investigates and subsequently fines the hospital.

The hospital sues XYZ Data Destruction for negligence and asks for damages equal to the amount of the fine.

Scenario 3
MNO has only been in business for about 1 year, and while sales are still under $300,000, it is growing steadily. A reporter for Eye Witnesses News Team sees a careless employee of the MNO Mobile Shred Company spill records from a financial institution on the ground in the parking lot. The wind is blowing hard enough that lots of documents get away. The reporter then collects some of the documents later that day outside of the Client’s building and broadcasts his discovery on the local news, naming the financial institution and MNO Mobile Shred Company in the report.

The financial institution sues MNO Mobile Shred Company for failing to properly dispose of the documents. It asks as damages, loss of revenue resulting from the negative publicity resulting from the broadcast. MNO Mobile Shred Company gets off the hook because the Bank cannot demonstrate damages, but it cost MNO $57,001 to defend.