The coverage amount needs to take into account the current revenue, potential revenue and the period of restoration after the disaster incident. Many businesses often makes the mistake of underestimating the cost of repair & restoration, and this expense could snowball to a large amount if the period of restoration take months or years to bring the business back to a fully functional state.
Specialised equipments are typically more expensive to re-purchase or make, or reallocation of business premises could be made more difficult in an inaccessible country/ state. As each business is setup differently, owners need to evaluate the following points which would ultimately determine the cost of the insurance policy:
Expected growth and inflation
Moving and relocation costs
Costs associated with doing business from a temporary location, such as exterior signs and other
Bills you won’t have to pay, such as building maintenance fees
Employee costs for staff who won’t be employed during the rebuild, including employee benefits
and workers’ compensation insurance