When you compile a program that uses the insert [colored] file operation, you should test the value of the built-in function ioerror to see if the operation was successful. The value returned by ioerror is a boolean value: if the operation was successful (there was no failure), the value is false; if it failed, the value is true.
For example:
response to start
add to Report
insert file Report
if ioerror
then ...
end if