8 ADJUSTINGTODAY. COM A D J U S T I N G T O D A Y “all other perils” deductible is subtracted not from the limit of insurance, but from the loss or adjusted loss as it is in standard commercial property insurance. If more than one deductible applies, most DIC policies apply only the highest deductible to the loss. Valuation Clause Valuation provisions in DIC forms Business Interruption Commercial insureds that carry business interruption or business income coverage in their commercial property policy also need to purchase the coverage in their DIC policy to respond to flood or earthquake losses. Many DIC forms do not include coverage for business income loss, rental value, or extra expense. In many forms, there is an exclusion for loss due to delay or loss of business income. Business interruption coverage must be specifically added to the DIC policy if that coverage is considered necessary or desired. The AAIS program offers two income coverage options: 1. Earnings, rents, and extra expense. 2. Earnings and extra expense. Ordinance or Law The ordinance or law exclusion can be especially troublesome for insureds that sustain a serious property loss. The exclusion precludes coverage for loss due to the enforcement of laws that regulate demolition, repair, etc., after a loss to a building. The law or ordinance may require the demolition of a building that has been badly damaged and the reconstruction to be in compliance with current building codes, and this is especially true in areas that have a high exposure to flood or earthquake. Without ordinance or law coverage, the policy would not pay for the loss of the undamaged portion of the building, demolition can vary, but the insured usually will have the option of obtaining coverage on a replacement cost or actual cash value basis. As a general rule, the DIC policy should provide coverage on the same basis as that of the underlying commercial property policy to minimize the chance of a misunderstanding in adjustment of the claim. Valuation provisions in DIC forms can vary, but the insured usually will have the option of obtaining coverage on a replacement cost or actual cash value basis. “ ”
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