Building Ordinance and the Construction Risk
A common misconception is that Building Ordinance Coverage should only be provided for older buildings. Building Ordinance is a key coverage even when writing Builders Risk Coverage. We learned our lesson the hard way when Santana Row in San Jose burned to the ground when it was near completion. Building Ordinances changed after that loss which affected the costs of re-construction of Santana Row
Did You Know: Building Ordinance is typically excluded on a Builders Risk Form and can be added by endorsement
Did You Know: Building Ordinance only pays for increased costs of construction that are in effect at the TIME of LOSS. Many times ordinance changes go into effect after a loss and thereby would NOT be covered on the typical Building Ordinance Endorsement
Did You Know: When possible, language should be changed on the Building Ordinance Endorsement to say that it will pay for ordinance changes in affect at the time of RECONSTRUCTION. Safest method is to have the Ordinance or Law exclusion removed, which some insurance companies will do
Laurie Infantino, AFIS, CISC, CIC, CRIS, ACSR, CISR
Insurance Skills Center
www.InsuranceSkillsCenter.com