Once the insurance is in place the loss of income cover is the least likely to have a change made to it either at renewal or during the insurance year.
Is the sum insured too high? You could be paying too much. More likely it is not enough and a shortfall at the time of a claim could have a serious effect.
It is suggested that when you receive your renewal notice you consider the sum insured and the indemnity period.
Your starting point is the indemnity period. This is the maximum period of time for which the insurers will pay the claim for loss of income. How long would it take to clear the site, obtain planning and other permissions, architects and surveyors, build time, and re-furnishing and re-marketing? It always takes longer than you think; indemnity periods are usually available for 24, 36, 48 and 60 months.
The sum insured has to be adequate for the indemnity period and allow for trends in your business and trends in self catering generally. The problem is that you will never be able to be exact in your answer so always round up.
David J Morris ACII
Chartered Insurance Broker