Ignorance is not bliss

“There are risks and costs to action,” John F. Kennedy said. “But they are far less than the long range risks of comfortable inaction.”

Forms of risk are unique to the RIM (records and information management) industry, such as damage to a customer’s property. A water leak could soak thousands of boxes of records. The customer could sue, claiming the operator’s negligence caused the leak. However, this major potential liability is not covered by a commercial general liability (CGL) policy. The standard CGL policy specifically excludes claims or suits arising from damage to “property of others in your care, custody or control.”

Property loss is hardly the only risk to RIM companies. While confidentiality of client information always has been a concern, only recently have state and federal governments enacted specific protections concerning personally identifiable information that have exponentially increased risks from unauthorized disclosure. Additionally, medical information is strictly protected by the Health Insurance Portability and Accountability Act (HIPAA). If a RIM operator stores medical records or any records containing medical information, unauthorized disclosure is a significant risk to be managed.

A company may choose to avoid risk by not offering services with the greatest exposures, such as data protection or digital archiving. These are generally not practical solutions for a full-service provider, however.

Instead, many RIM providers focus on actions to reduce risk, such as installing advanced alarm systems and better fire-suppression and warning systems or using more restrictive contract terms. But operational necessities, a competitive market, client demands and limited technological capabilities can hinder these efforts.

This leads us to a third strategy—risk transfer through insurance. An insurer becomes familiar with the details of your operation using tools like application data, current policies and loss history information. The insurer provides contracts to assume some risk in exchange for premium payments.

Risk transfer is the subject of our latest white paper, “Risk Management and Insurance for the Commercial Records and Information Management Services Industry.” Written by PRISM Members Jim Booth and Brian Jungeberg, this resource—free to PRISM members—was called an “extraordinary, masterful new white paper” by one reviewer.

Don’t fall prey to “comfortable inaction.” Download the paper. Understand the issues. Grow. Thrive. Win.

Dave Bergeson is executive director of PRISM International, Chicago, and can be reached at dbergeson@prismintl.org.