Understanding the importance of insurance policy on disaster recovery is an essential step
in the preparation of a disaster recovery plan. A good insurance policy is needed not only
for personal benefits but also in cases of disaster recovery and in developing business risk
analysis. Insurance policy in critical times covers for hardware, equipment, data and other
expenses replacement. The main task of insurance companies is to assess the level of
coverage that is necessary in cases of disaster. They typically give an estimate on the
expenses incurred in company’s business loss.
Having an insurance policy is important so that businesses can deal with damages and
costs sustained in disasters. Because of the support of most policies contain, regaining
lost assets, revenue and an investment are taken care of in the disaster and continues until
the company restores its normal operation. Furthermore, the insurance company will ask
the company for a substantial proof that business loss indeed took place. Such is the
importance of having an insurance policy on disaster recovery.
With an insurance policy for disaster recovery, loss of business continuity is covered
because business downtime incurred losses will be included in the coverage. While some
damages may exceed the expectations, most insurance policies will include them as part
of their coverage. A good insurance policy for disaster recovery will also include
coverage on telecommunications losses especially equipment.
It is important that the in a disaster recovery plan, a sufficient insurance policy should be
considered in the planning and implementation.1