ADJUSTERSINTERNATIONAL.COM 11 Thus, the added cost to reconstruct a damaged building to meet ADA standards today would either be excluded under an older version of a commercial property policy or limited to the increased cost of construction coverage provided under newer versions. Not all types of regulations impacting construction would qualify for ordinance or law coverage, however. Suppose that a state or municipality passed a law with standards for recreational facilities to protect user safety or promote competitive balance. Since the law was not enacted to regulate construction or protect public safety, reconstruction of a damaged facility might not qualify for coverage of the increased costs imposed by the new standards. What constitutes enforcement? The most current versions of ordinance and law provisions refer to increased costs incurred for “enforcement of or compliance with” a building ordinance or law. As stated above, the “compliance with” language effectively allows insureds to proceed with reconstruction to code without having to be compelled to do so by a municipal enforcement action. This does not suggest, however, that insureds can voluntarily comply with codes that are not mandatory and expect the insurer to pay the cost. Some communities promote certain types of construction, particularly “green” construction designed to be environmentally and energy efficient, through tax incentives and other benefits. If a building owner is not required to reconstruct to those standards, and the requirement is not enforced by some sort of penalty, the owner can expect no ordinance or law coverage. Building owners and municipalities are not free to expand the exposure of insurers on their own.
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