Total Insurance Value – Why Accuracy Counts
Total insurance value (TIV) is a commercial property insurance term that specifically refers to the sum of the full replacement cost value of:
- Covered property
- Business income values and
- Other insured property
A commercial property policy may also cover loss of income or increases in expenses that result from covered property damage.
Determining Your Total Insurance Value
A total insurance value (TIV) is calculated by adding together the total property, equipment, inventory, tools, etc. at each business location and combining these into a business income worksheet. These forms are used by your ALIGNED advocate to:
- Estimate your organization’s annual business income for the upcoming 12-month period, and
- Select a relevant business income limit of insurance for your organization
The selected percentage (or multiple) of your estimated annual business income for the upcoming 12-month period should be based on how long it would take to replace all damaged property as well as resume normal operations in the event of a worst-case loss situation.
It is important to note that most insurers require a completed business income worksheet as a condition of activating the business income agreed value coverage option.
Why Is Having An Accurate Total Insurance Value (TIV) Important?
The total insurance value (TIV) is an important number for all commercial property policies because it is typically the number that is applied against the rate to determine your insurance premium.
For example: $1,000,000 (TIV) x $0.4 (Commercial Property Insurance Rate per $100 of TIV)]/100 = $4,000 annual premium per year.
Talk to Us About The Total Insurance Value For Your Business
Depending on your organization’s operations and the nature of the scenario, recovery time after an insured loss may exceed 12-months. An ALIGNED advocate can provide expert guidance on how to calculate a total insurance value and ensure that your business has the best commercial property coverage.
To learn more about ALIGNED, our commitment to providing insurance expertise and the best insurance products or solutions, talk to one of our advocates today. We can help you secure the best products, services and solutions for your business.
| ALIGNED Across Canada 100% Canadian owned, ALIGNED is a premiere insurance brokerage that serves more than 1,400 clients across the country. ALIGNED’s offices in Toronto, Calgary and Vancouver are supported by a national operations centre in Cambridge, Ontario. Uniquely within the industry, ALIGNED creates, negotiates and delivers the best business insurance and risk management strategies/solutions to organizations like yours. |
Source: IRMI
