For security and legal reasons, it's vital that your small business or organization shreds sensitive documents. The problem is that occasionally, destroying documentation via paper shredding can get you into trouble if it is not done properly. 

How do you tell the difference between what you legally must shred and what you legally cannot? Here are some guidelines.

What is All Right to Shred?

Most small businesses keep customer records and other information about sales and products that they would not want to have competitors view. These are good examples of documents that should be shredded. They include:

• Internal sales reports
• Customer and prospect lists
• Price lists
• Quotes and proposals
• Job applications and employee forms

In fact, some of these records must be disposed of under The Fair and Accurate Credit Transactions Act (FACTA), which requires all sizes of companies, even small businesses, to protect and dispose of customer information and personal data. The idea is to make sure that you don't put customers at risk of identity theft by treating their information carelessly. 

While this doesn't often impact business to business sales records, it can if a specific individual is named in your paperwork, along with personal information like a social security number or credit card number. To be safe, small businesses are best advised to make a policy of shredding anything with customer data on it that is no longer in use.

One more issue can impact certain types of small businesses that work with health care providers. The Health Insurance Portability and Accountability Act (HIPAA) requires that patients' medical information be kept private. Violations can be penalized to the tune of tens of thousands of dollars. Any health-related documents that are not in current use should always be properly shredded.

What Should Not Be Shredded?

Documents that are improperly destroyed may lead to penalties if your business is involved in any civil or criminal cases. You may remember the case of energy company Enron, when both the company's accounting company and the firm itself were penalized for shredding tons of documents related to legal cases.

The truth is that almost all business documents can and should be shredded for the security reasons listed above. But to make sure that it doesn't appear that you're destroying evidence in a court case, you need to have a policy in writing that states what gets shredded and when. Then keep documentation of what types of documents your business destroyed and when it was done. You should be able to point to dated records that show a trusted third party shredded documents regularly for you as part of your ongoing business needs.

If you have questions about shredding business records and other important corporate documents, talk to our experts. We can help you set up a policy and a schedule for regular shredding, so your customer information is protected and yet you won't be in trouble legally in case of a lawsuit.  To learn more, contact a paper shredding company like AIM Alaska.