This article was originally published in the
Policyholder Advisor (Volume 20, Issue 6)
Ordinance or law coverage is a common type of insurance added to
commercial property insurance policies. It covers the cost to a
policyholder caused by the enforcement of an ordinance or law
following loss or damage to insured property. Ordinance or law
coverage is designed to restore the policyholder to its pre-loss
position by covering the costs of demolishing, repairing,
rebuilding or replacing undamaged property due to the enforcement
of an ordinance or law.
Because property insurance policies containing ordinance or law
coverage often also exclude damage caused by wear and tear, it is
not unusual for situations to arise where wear and tear is
associated with the post-loss enforcement of an ordinance or law
and, all too often, insurance companies improperly try to use the
wear and tear as an excuse to avoid paying ordinance or law claims.
This issue was squarely before the
