Written by Justin Goodman, CIC, CISC, CLCS, CEO and Co-Founder, Total CSR Published: October 6, 2026 · Last reviewed: October 6, 2026
In plain language: A Statement of Value is a list a business owner gives their insurer showing what each building, its contents, and business income are worth. The insurer uses these numbers to set coverage limits and premium. Wrong numbers mean wrong coverage.
Technical definition: A Statement of Value is a policyholder-certified schedule of insured locations, building and personal property values, and business income exposures, submitted during underwriting or renewal. Carriers use it to calculate premium, confirm insurance-to-value compliance, and apply coinsurance or blanket limit provisions under commercial property policies like ISO’s CP 00 10.
Statement of Value at a Glance
| Attribute | Detail |
|---|---|
| Also known as | SOV, Schedule of Values, Statement of Values |
| Category | Commercial property underwriting document |
| Lines of business | Commercial Property, Builders Risk, Inland Marine |
| Industries most affected | Real Estate, Construction, Manufacturing, Hospitality, Habitational |
| Related forms or endorsements | CP 00 10 (Building and Personal Property Coverage Form), CP 00 90 (Commercial Property Conditions) |
| Who bears the risk | The insured, if declared values are inaccurate or outdated |
| Common solution | Annual SOV review paired with a professional appraisal or replacement cost estimator |
| Also interacts with | Coinsurance clauses, blanket limits, agreed value endorsements |
Key Takeaways
- A Statement of Value is a schedule of declared property values that a business submits to its insurer to establish commercial property coverage limits.
- Agencies rely on the SOV to quote accurate premium and to confirm the client is not underinsured relative to actual replacement cost.
- The most common pitfall is stale or guessed values, which trigger coinsurance penalties or leave a client without enough coverage after a major loss.
- A quick win is requiring clients to update the SOV annually using actual construction costs, not purchase price or tax-assessed value.
What Is Statement of Value in Insurance?
A Statement of Value is the foundation document underwriters use to price and structure commercial property insurance. It exists because carriers cannot physically inspect every location a business owns, especially for companies with multiple buildings, warehouses, or job sites spread across states. The SOV substitutes for that inspection by putting the burden of accurate valuation on the policyholder, who presumably knows the business and its assets best.
The document typically breaks down each location by address, building value, business personal property value, and business income or extra expense exposure. Carriers compare these declared values against their own cost-per-square-foot benchmarks or replacement cost estimators to spot outliers. A retail chain with twelve stores, for example, might submit an SOV showing each store’s building value at $1.2 million and contents at $400,000, giving the underwriter the data needed to set a blanket limit across all locations rather than scheduling each one separately.
Coinsurance clauses give the SOV its teeth. Most commercial property forms require the insured to carry a limit equal to a stated percentage, often 80 or 90 percent, of the property’s actual value at the time of loss. If the SOV understates value and the insured is underinsured at that threshold, the carrier pays only a proportionate share of any claim, leaving the policyholder to absorb the rest.
How Does Statement of Value Work?
- The data request. The underwriter or agency asks the insured to complete an SOV template listing every location, building value, contents value, and income exposure.
- The valuation. The insured, often with help from a CPA, contractor, or appraiser, assigns replacement cost figures to each asset rather than market price or book value.
- The submission. The agency forwards the completed SOV to the carrier, who reviews it against underwriting guidelines and construction cost data for the region.
- The rating. The carrier sets policy limits, calculates premium, and applies coinsurance percentages or blanket limit structures based on the submitted figures.
- The claim test. A loss occurs, and the adjuster compares the SOV’s declared value against the property’s actual value at the time of loss to determine whether coinsurance penalties apply.
Real Claim Examples Involving Statement of Value
Warehouse fire with outdated contents values
A distribution company submitted an SOV listing its warehouse contents at $2 million, a figure carried over unchanged for six years despite inventory growth. A fire destroyed roughly $3.5 million in stored goods. Because the policy carried an 80 percent coinsurance clause and the declared value fell well short of actual value, the carrier applied a coinsurance penalty, paying only a fraction of the claim and leaving the business to cover the shortfall.
Multi-location retailer with a blanket limit mismatch
A regional retailer with fifteen stores used a blanket limit based on an SOV that significantly understated two newly renovated locations. After a hailstorm damaged roofs at three stores, the adjuster recalculated insurance-to-value across the blanket and found the overall schedule was still adequate, so no coinsurance penalty applied. The blanket structure absorbed the valuation gap at individual locations, illustrating why agencies often recommend blanket limits over scheduled limits for clients with uneven location values.
Builders risk project with an inaccurate completed value
A general contractor submitted a builders risk SOV estimating a project’s completed value at $8 million, but change orders pushed the final cost to $11 million without an update to the policy. A windstorm caused significant damage late in construction. The carrier’s adjuster applied coinsurance based on the outdated $8 million figure against the higher actual completed value, reducing the claim payout and prompting the agency to add a mid-project SOV review to its builders risk workflow.
Statement of Value vs. Replacement Cost Estimator: What Is the Difference?
A Statement of Value is the client-submitted schedule of declared property values used for underwriting, while a replacement cost estimator is a tool, often software-based, that calculates what it would actually cost to rebuild a structure today. Agencies frequently use a replacement cost estimator to validate or challenge the figures a client has entered on the SOV before submitting it to the carrier.
| Comparison area | Statement of Value | Replacement Cost Estimator |
|---|---|---|
| Primary use case | Declaring values across multiple insured locations for underwriting | Calculating rebuild cost for a single structure |
| Coverage / concept type | Underwriting disclosure document | Valuation methodology or software tool |
| Typical exclusions | Does not independently verify accuracy | Does not account for business personal property or income |
| Who is most affected by errors | The insured, through coinsurance penalties | The agency, through E&O exposure if the estimate is misapplied |
| Common mistakes | Using outdated or market-value figures instead of replacement cost | Relying on default software assumptions without site-specific input |
What Are the Most Common Mistakes With Statement of Value?
- Clients enter market value or purchase price instead of replacement cost, which almost always understates the true insurable value and triggers coinsurance penalties after a loss.
- Agencies accept an SOV without reviewing it against a replacement cost estimator, missing valuation gaps before the policy binds.
- Values go unupdated for years despite renovations, inventory growth, or inflation in construction costs, creating a silent coinsurance exposure that surfaces only at claim time.
- Business income figures on the SOV reflect historical revenue rather than projected revenue during the policy period, leaving the client underinsured for lost income.
- Agencies fail to document that the client, not the agency, certified the SOV values, which weakens the agency’s defense if a coinsurance dispute becomes an E&O claim.
- Builders risk SOVs are not updated mid-project despite change orders that raise the completed value well above the original estimate.
How to Explain Statement of Value to a Client
Explaining Statement of Value to a personal lines client
Statement of Value typically does not apply to personal lines, but if a client asks, explain that commercial property owners fill out a similar form listing what their buildings and belongings are worth so the insurance company can set the right coverage amount. It is comparable to telling your homeowners insurer the value of a major renovation so your dwelling coverage keeps up.
Explaining Statement of Value to a small business owner
A Statement of Value is the list you give us showing what each of your locations, buildings, and equipment are actually worth to rebuild or replace today, not what you paid for them years ago. If those numbers are too low, your insurance company can reduce your claim payment through something called coinsurance, so we want to update this list every year together.
Explaining Statement of Value to a CFO or risk manager
The Statement of Value drives your coinsurance compliance and blanket limit adequacy across every scheduled location. We recommend reconciling it annually against a current replacement cost analysis, particularly after any capital improvements, acquisitions, or significant inventory shifts, because a stale SOV creates balance sheet risk the moment a major loss exposes an insurance-to-value gap.
Frequently Asked Questions About Statement of Value
What happens if my Statement of Value is wrong?
If your Statement of Value understates actual property value and your policy has a coinsurance clause, the carrier can reduce your claim payment proportionately, even if your total policy limit seems adequate. For example, a building insured at 60 percent of its real value under an 80 percent coinsurance clause could see claims cut by 25 percent or more.
Who is responsible for filling out the Statement of Value?
The insured is responsible for providing accurate values, usually with input from a CPA, contractor, or property manager who understands current replacement costs. Agencies collect and submit the SOV but generally do not independently verify every figure, which is why documenting the client’s certification matters.
How often should a Statement of Value be updated?
Most agencies recommend updating a Statement of Value annually at renewal, and immediately after any major renovation, acquisition, or significant inventory increase. Builders risk projects need updates whenever change orders meaningfully raise the completed project value.
Does a blanket limit eliminate the need for an accurate Statement of Value?
A blanket limit spreads coverage across multiple locations and can absorb valuation errors at any single site, but it does not eliminate the need for accurate values. Carriers still calculate overall insurance-to-value using the aggregate SOV, so systemic undervaluation across many locations can still trigger a coinsurance penalty.
Can an agent be held liable for a client’s inaccurate Statement of Value?
An agent can face an E&O claim if they failed to request updated values, ignored obvious red flags in the submitted figures, or did not document that the client certified the numbers. Courts generally expect the insured to know their own property values, but agencies strengthen their defense by keeping a clear record of annual value review requests.
Is a Statement of Value the same as an appraisal?
A Statement of Value is a self-reported schedule, while a professional appraisal is an independent third-party valuation, often required for high-value or unique properties. Many agencies recommend a formal appraisal every few years to cross-check the figures a client reports on the SOV.
Related Insurance Terms
- Coinsurance Clause: A policy provision requiring the insured to carry limits equal to a specified percentage of the property’s value, directly enforced using the figures reported on the Statement of Value.
- Replacement Cost Value: The cost to rebuild or repair property with new materials of like kind and quality, the standard that Statement of Value figures should reflect rather than market price.
- Actual Cash Value: Replacement cost minus depreciation, sometimes used instead of replacement cost on an SOV for older or lower-priority properties.
- Agreed Value Endorsement: A policy modification that suspends the coinsurance penalty by locking in the insurer’s acceptance of the SOV figures for a policy period.
- Blanket Limit: A single limit applying across multiple locations listed on the Statement of Value, reducing the impact of undervaluation at any one site.
- Insurance to Value: The ratio between a property’s declared value on the SOV and its actual value, the core metric carriers use to assess coinsurance compliance.
Sources and References
- Wikipedia. Coinsurance.
- Wikipedia. Property insurance.
About the Author
Justin Goodman, CIC, CCIP, CISC, CLCS, CRIS, PCIA, QCLS, MFHR CEO and Co-Founder, Total CSR, Inc.
Justin Goodman is a third-generation insurance broker with over two decades in agency operations. He has trained more than 100,000 CSRs, account managers, and producers in commercial and personal lines coverage, from workers’ compensation to construction risk. He was named 2024 Insurance Journal Agent of the Year and one of the nation’s top five construction insurance experts by Risk & Insurance. He is the author of Retain, which applies cognitive science research on memory and knowledge transfer to insurance training, and speaks nationally on how agencies build durable technical expertise in their teams.