When an Agent, Tourist, Hostage, or Minion is killed, a Body Bag is created. They are irrefutable proof of your evilness. Heat will be generated if an investigator happens across one and leaves the island with that information. Tourists will panic when they see them, and Minions who see a Body Bag have an area effect which will sap Loyalty and Attention.
They can be moved by placing a move tag on the Body Bag to hide it in a more isolated spot. The most convenient way to get rid of them is by building a Freezer room. Minions will automatically take Body Bags to it, and they won't have any area effect once stored there. Body Bags will decay over time, but putting them in the Freezer speeds the process up.