the unstated prerequisite is for regulation to stipulate a minimum reserve so that the competitive field remains level, otherwise the dynamics would lead to risk ignorers eventually crowding out the disadvantaged risk mitigators. for business risks, i'd support a reserve requirement of 12 months, which phases in as a fledgling company reaches sustainability.
but, a pandemic is not an idiosyncratic risk of individuals or firms, but rather a broad systemic risk, and as such, should be bourne by society as a whole, not each individual and business separately.
Let me understand this: you want a business to have enough capital to pay its expenses for 12 months on zero revenue?
Holy Jesus; that's massive.
Capital is not free. Typical costs of capital today are about 8% (1). You're proposing, essentially, an 8% tax — not on a firm's profits, but on a firm's expenses. I don't want you to think, "oh, that will push a few firms into failure, rendering their entire business unviable." I want you to think, "it will spare a few firms." I also shudder to think of what happens to firm formation in the face of the steep, steep barriers to entry this raises.
You propose a very, very expensive way to build resilience. You're right, though, that the costs would be borne by all of society. Maybe it's worth it? But it's a hell of an ask, and I'm skeptical.
it's not that incredible. most going concerns already have the working capital, current assets, and receivables to hold out 3-6 months.
and the cost of capital isn't the right rate to be applying here. a better estimate is the spread between the cost of debt and their short-term securities rate (like the interest rate on current assets), which could even be negative (that is, making money). certain businesses can even be financed via their receivables alone.
damodaran is a good reference. his book was the basis of my finance and valuation classes. but it's dense and not easy to implement without going all in. it really taught me that finance and valuation are arguments, not analytical solutions.
but, a pandemic is not an idiosyncratic risk of individuals or firms, but rather a broad systemic risk, and as such, should be bourne by society as a whole, not each individual and business separately.