Day One

Day One is a form of Reinstatement cover used as a method of countering the effects of inflation on sums insured. This can apply to buildings and/or machinery, plant and all other contents. The sum insured is shown in two parts – Declared Value (normally shown in brackets) and Sum Insured. The declared value should represent the Reinstatement cost on the first day of the period of insurance (i.e. on Day One). The declared value is then increased by an agreed percentage (the inflation provision) to produce the ‘Sum Insured’, which should be adequate to meet the reinstatement costs that could be incurred until the end of the period of reinstatement. This could be years after the damage has occurred.