CASE STUDY

Having your declared values properly calculated and stated on the schedule of insurance is essential to the protection of the assets/revenue/profits which are being covered. Without the proper calculation and declaration of the values at risk, the insurance policy as risk management tool can be significantly impacted. In fact, it can be so significantly impacted that in the event of a loss from an insured peril the recovery of the business could be in question.

Alliance Consulting can work with insureds, brokers and insurers to provide the appropriate basis and detailed calculation for the declaration of values. Through detailed analysis and agreement on the calculation ambiguity is removed as to what is being covered and provides greater assurance to all parties that assets/revenue/profits are appropriately covered.

Cover for business interruption is based on the declarations of value by the insured. If the declared values are too high or too low the insured is, respectively, paying premium for coverage they do not require, or will most likely be in a position of co-insurance. Nether is a position an insured would want to find themselves in.

A formal review of the declared values would provide assurance that the insured values declared are proper. The review process would comprise detailed procedures including:
review of the current declared values calculation and current policy wording to understand the current methodology;
work with the broker and insured to understand the basis of cover and requirements for cover;
prepare a financial model to calculate the declared values;
present and discuss the results with the insured, broker and insurer.