As an agent, we assist you
in finding the right coverage for your business, mitigating risk
exposures you may have present, and assisting in filing and resolving
claims when necessary by reducing unnecessary complexities related to the
Part of this involves
education regarding preserving evidence, whether physical, electronic or
both. If a company auto is damaged in a collision, you have a duty
to preserve evidence related to that accident. Many newer vehicles
utilize 'black box' technology that records speed, brake and steering
inputs. The vehicle saves such data in the event of a
collision. From a liability angle, if a customer trips and falls in
your business, and you have a video system, then preservation of evidence
extends to saving footage of the day and incident in question.
Whether that evidence is
electronic or physical, you have a duty to preserve it, even if it paints
your operation in a negative light. As your agent, it is our duty
to alert you to this fact when you contact us about filing a claim.
The failure to preserve
evidence may expose your business to an allegation of spoilation of
evidence which can have serious legal ramifications, including negative
jury instructions, sanctions and, in some states, a separate cause of
action may be brought against you.
The availability and
utilization of electronic evidence has grown dramatically over the last
20 years. More and more businesses utilize surveillance cameras in
their storefronts, in their warehouses or employee-only areas, parking
lots and more. Many utilize electronic record keeping, extended
email storage and a variety of other technologies designed to save
information. This has made keeping documentation much more organized,
easier to search and share, but it has also added a layer of
responsibility on owners and operators to understand how to use their own
How Important Is It For Business Owners To Preserve
As the availability and
variety of evidence has increased, so has the need to preserve it.
The courts have reasoned that it is an important requirement that the
parties to litigation preserve relevant evidence to prevent one party
from subverting the fair administration of justice by destroying
A recent case involving a
Philadelphia-area bar demonstrates the importance of properly preserving
evidence. In this example, the patron of a bar/restaurant claimed
that the bar over-served another patron who then assaulted and injured
him. The bar advised the victim that they had surveillance tapes of
the incident. When suit was filed months later, the video no longer
The case (St. Clair v 1511
Locust Tavern C.P. Phila No. 140300915), went to trial and the judge
instructed the jury they could assume that the video would support the
patron's rendition of events because the bar would never destroy evidence
that was helpful to them. This is called the "adverse
inference" jury charge, and legal journals are littered with similar
cases in which the court instructs the jury that lost evidence can be
assumed to be harmful to the party who lost it. In essence, the bar not
only lost helpful evidence, but they also gave the jury the impression
that they were destroying damaging evidence. Ultimately, the jury
returned a large verdict in favor of the patron.
When Does A Business Need To Preserve Evidence?
Generally, the duty to
preserve evidence arises the moment that litigation is reasonably
anticipated. Practically, that means a policyholder should preserve
evidence on any occasion where property damage or bodily injury is
incurred. If someone is injured at your business, be prepared to save the
video and complete an incident report. Even if you offer assistance
to someone who has been injured and they decline you should still
preserve evidence. In some instances, someone is injured more
severely than they may realize and their symptoms don't present or become
acute until later on or even days later.
In some circumstances a
party may send a written request that records be preserved. This
request will act as notice of the business' duty to preserve that
What Does The Duty To Preserve Encompass?
The duty to preserve
evidence includes the duty to locate and safely maintain the
evidence. Electronic data preservation may require additional
steps, due to automated deletion features or automated overwriting of
data. Businesses must take active steps to halt the automatic
deletion process and preserve the evidence. Some practical tips:
the event of a loss involving either property damage or bodily
injury, save all relevant records. If possible, have duplicate
records made and save them offsite, ideally with counsel or a
reputable third party. Be sure to also document the chain of custody
of the evidence.
the relevant evidence beyond the statute of limitations for the
potential claim. If your state has a two-year statute of
limitations, save the documentation longer than the two-year
statute. In the event the injured party is a minor, the business
will be required to maintain the records for a longer period of
time; typically, this means preserving them past the minor's
reaching the age of majority.
sure you know how your surveillance system works: how it stores
video, if the videos can be overwritten, how quickly something is
overwritten, and how the video can be retrieved and saved to an
sure you understand how your electronic records are kept. If
you're saving copies of invoices, receipts, statements, work
schedules, incident reports, etc... are they being stored on your
local computer or backed up to a cloud storage service? Are
they ever overwritten as free space dwindles?
and implement written protocols for record retention, share them
with your managers, and everyone follow those written procedures.
When in doubt whether or
not something should be preserved regarding a known incident, err on the
side of caution and save it.
We have written about
several of the topics explored here before. If you'd like to review
those articles as well: