Total Insurable Value (TIV) : What is it?

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Total Insurable Value (TIV):

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Total insurable value is a property insurance term referring to the sum of the full replacement cost value of the insured’s covered property, business income values, and any other insured property.  Total insurable value is typically used in property insurance policies for businesses and other organizations that insure against damage to an organization’s buildings, contents to a covered cause of loss, such as a fire, flood, windstorm etc. A commercial property policy may also cover loss of income or increases in expenses that result from the property damage.

How Do You Calculate A Total Insurable Value (TIV)

A total insurable value (TIV) is calculated by adding together the total physical property, equipment, inventory, tools, etc. at each location and combining it with the final number calculated on a fully completed business income worksheet.  A business income worksheet is a form that is provided by your insurance broker that is used to estimate an organization’s annual business income for the upcoming 12-month period, for purposes of selecting a business income limit of insurance. The selected percentage, or multiple, of the organization’s estimated annual business income for the upcoming 12-month period, should be based on how long it would take to replace all damaged property and resume operations in the event of a worst-case loss. For some organizations, this period of time could exceed 12 months. 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 Insurable Value (TIV) Important?

The total insurable 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 the premium.  Ex. [$1,000,000 (TIV) x $0.4 (Commercial Property Insurance Rate per $100 of TIV)]/100 = $4,000 annual premium per year.

To learn more about how to accurately calculate your organizations total insurable value speak an ALIGNED Insurance Advocate or connect with us at

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Other posts related to Total Insurable Value (TIV)


1. What does full insurable value mean?

In a nutshell, full insurable value is the total value of all of a business’s insured property. For example, under a Commercial Property Insurance policy, that would mean adding up the value of the building, office or workspace covered under the policy plus the value of the contents within the structure that are also insured such as any renovations or upgrades done by the business to the workspace; any machinery, tools or equipment that are covered; insured stock or inventory which can include property stored off-site; office equipment like computers, printers and phones; cash and other financial instruments and any other physical assets owned by the business that is covered by their insurance policy. 

Depending on the policy, coverage may also include insurance for non-physical property like business income and/or the extra costs the business would have to pay for an incident covered under the policy. Those values would also be included in the full insurable value.

2. What is the insurable value of a property?

The term “insurable value” is typically used to refer to the amount of insurance that can be carried on items contained within a property that are susceptible to loss during an insured peril, like a fire or a flood, that the insurer will compensate the policyholder for in the event of a loss covered under the policy. This can include the costs of clearing a site and the reconstruction costs of a structure such as labour and materials, as well as the value of the contents within the structure.

3. What is an insurable replacement cost?  

Insurable replacement cost refers to the estimated actual cost to replace a structure or an asset that is completely destroyed by a peril included under a commercial property insurance policy and that structure or asset cannot be repaired. For example, if a fire burns down a warehouse, the insurable replacement cost can include the costs of building materials, architect and/or engineering fees and contractor/construction labour costs. The insurable replacement cost does not include the ‘market value’ of the property in question.   

4. What is total insurable value vs replacement cost?

Total insurable value is a calculation of all insurable assets (and business income) that is based on the prices paid for the property that is covered by the commercial property insurance policy. Replacement cost is the total amount of all the costs necessary to replace those assets in case of a total loss. Because the calculations are based on different criteria, the total insurable value will be different from the replacement cost.

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