FREE SHREDDING SERVICES
Free Shredding Services should be carefully considered by risk managers as the nature and acceptance of the offer may lack the necessary requirement of “consideration” to complete the requirements of a contractual obligation and duty to perform.
Consideration is the bargained for exchange. It is the legal benefit received by one person and the legal detriment imposed on the other person. Usually, consideration takes the form of money, property, or services. All parties in an agreement must give consideration in order to create a contract. An agreement without consideration is not a contract.
Consideration must be real, but need not be adequate. In the case of shredding for instance, agreeing to shred documents for free may not constitute a binding contract, and thus negate the parties’ duty to perform. While consideration need not be adequate, contracts in which the consideration of one party greatly exceeds that of another may nevertheless be held invalid for lack of real consideration. In such cases, the fact that the consideration is exceedingly inadequate can be evidence that there was no consideration at all and simply not worth the risk from a risk management perspective.
Companies accepting proposals of Free Document Shredding Services should confirm their vendor is a NAID Certified Member of the National Association for Information Destruction, and has minimum insurance coverages including Professional Liability (Errors & Omissions) as simple general liability will not cover in the event of a claim regarding such matters.
NAID certification standards not only regulate the shred within which the documents are destroyed before it is recycled, but the disposal process itself, including strict Agreements for Responsible Disposal of Destroyed Materials between the shredding company and the Disposal Agent.
Free Document Shredding at times may be provided to customers who are purging large volumes of paper material. Many factors are considered when offering free shredding to a potential customer including but not limited to market conditions, paper grade/quality, and volume.
When selecting a document shredding service provider it is important to make sure that your provider is not only a NAID Certified Member of the National Association for Information Protection, but are properly insured with an adequate Professional Liability Policy. Downstream Data Coverages is the only professional liability insurance designed for the unique risks of today’s data-related service provider and the customers they service, and endorsed by the National Association for Information Destruction. Downstream Data Coverage is the only professional liability insurance developed exclusively for NAID Certified Members to address the many shortcomings of standard professional liability coverage that leave service providers and their customers at risk.
At this time Data Shredding Services of Texas, Inc. is one of 45 Document Shredding Companies Nationwide who are properly insured with Downstream Data Protection as its Professional Liability Insurance.
For More Information Please Contact your DSS – Information Destruction Specialist at (713) 463-9300 or visit www.shreddinghouston.com.
Will general business liability insurance cover damages from service provider mistakes?
No, general liability insurance does not cover claims resulting from professional errors and omissions. Only properly crafted professional liability insurance covers such claims.
If a data related service provider says they are “bonded,” does that protect their customers from financial loss due to mistakes or misdeeds by that service provider?
No, generally the term “bonded,” refers to “employee dishonesty bonding,” which will only cover loss due to employee theft while on the customer’s premises and coverage levels are relatively small low. There is no case in which employee dishonesty bonding would cover financial loss to a customer due to the errors and omissions of a service provider allowing unauthorized access to their customer data.
What types of data-related service providers are eligible for Downstream Data Coverage?
Downstream Data Coverage professional liability insurance is available to data destruction services, records storage, data tape storage and data transport companies that are NAID AAA Certified.