How Long to Keep Insurance Records

Q: How long should a church keep expired liability insurance policy documentation?

A: While many important documents have a shelf-life and can be discarded after a certain number of years, experts recommend that churches keep copies of their liability insurance policy documentation forever. 

Many financial records only need to be maintained between three and seven years. For instance, payroll tax records, including payroll registers, housing allowance forms, W-4 forms, and payroll deductions should be kept between three to seven years. The same goes for IRS forms W-2 and 1099. (While the IRS says many records can be discarded after three years, there are some situations where it is necessary to keep them for seven.)

However, some corporate records, including articles of incorporation and bylaws, and board minutes should be kept forever.

Over the past several years, the retention period for expired insurance policies has changed. While you might have seen recommendations for three to ten years after expiration, experts now recommend that liability policies, even though expired, should be maintained indefinitely.

Here’s why. Liability claims usually have a statute of limitations. This is the maximum time after an event (i.e. injury, accident, or abuse) within which a claim has to be made. But in the case of an injured minor, the clock may not start until the minor turns 18. And many states have different time limits. In California, a sexual abuse victim must file a lawsuit within 8 years after reaching 18; in Texas, the lawsuit must be filed within 15 years after turning 18; and in Connecticut, the victim has 30 years to file a lawsuit after turning 18. However, Florida has no statute of limitations for sex abuse victims.[1]

When a claim is made, the insurance policy that was in effect at the time of the alleged event will have to be reviewed. This document will shed light on coverage amounts, and the insurance provider’s duty for defense and indemnification. Insurance companies put the burden of coverage and proof upon the insureds. Do you know who you were insured with 20 years ago?  Maintain a permanent file to keep these insurance and other corporate documents safe and secure.