Agreed Value. Last month's article went into some detail on the concept of Agreed Value, with the attendant potential benefits and pitfalls. Although the language of the BI option is not exactly the same as that in the Commercial Property Form, it is very similar in operation. Here are the three key steps:

The insured must complete an approved work sheet, providing all the necessary accounting numbers to make a proper calculation of the coverage estimated to be needed for the coverage period.
The insured must agree to carry at least the amount of coverage determined by multiplying the total amount on the work sheet by the applicable coinsurance percentage chosen.
Assuming the insured complies with Step 2, any coinsurance penalty is waived. However, if the insured is found at time of loss to have carried less that 100 percent of the amount mandated by Step 2, then the insured loss will be "coinsured" to the extent the amount actually carried falls short of the requirement. Depending upon the amount of noncompliance, the insured might actually have been better to ignore choosing this option and simply rely on the coinsurance clause in the basic form.

So when it comes to providing a coverage feast for your clients, follow the long-proven advice:

Although the main dishes are a given, it's the side offerings that separate a mere meal from a truly sumptuous repast.
Every bit as much pride and expertise should go into the proper choice and preparation of the sides as is expended on the main course.
To elevate an otherwise adequate side dish to true bliss, always sweeten the offering by modifying to the unique tastes and preferences of your guests.

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