How Building Ordinance Coverage Affects Commercial Property Insurance

building ordinance or law coverage

Ensuring your commercial property with insurance is a step many businesses make to protect their physical investments. Unfortunately, not all policies come with building ordinance or law coverage. Here’s how that coverage affects your commercial property insurance policy.

Coverage Gap

Without the ordinance coverage, your commercial property policy may have a large gap in coverage should the building need repairs or reconstruction. If the policy doesn’t cover the costs, your business is left footing the bill.

Construction Costs

The cost of constructing a new building may have risen substantially since you completed construction originally. Some commercial property insurance coverages only payout based on those initial numbers. This additional rider takes into account the increasing costs and new building codes or regulations saving you money on reconstruction.

Demolition Costs

Many commercial property insurance policies do not cover the cost of demolition. This means you are responsible for clearing the building to make it ready for the construction crew to come in if the insurance company feels part of the building is usable. Often this additional coverage comes in and covers the costs of demolishing the whole building.

The many benefits of building ordinance or law coverage cannot be overstated. Look through your policy to see what restrictions your current commercial property insurance has and whether you benefit from additional coverage.