Ordinance or Law Coverage: Code for Recovery!



...the additional time needed to restore operations, when delayed because of the enforcement of building or zoning laws. Unlike the property coverages, where any one or more of three separate coverages may be needed, this endorsement covers the additional time needed to restore operations whatever the reason for the delay occasioned by the application of these laws.

As with the property coverage, having determined what impact enforcement of these laws might have, it is necessary to construct a worst case scenario and decide the maximum amount of coverage that might be needed. The endorsement does not provide for a specific additional amount of insurance nor a specific time period; it simply waives the effect of the Ordinance or Law Exclusion. If a substantial delay can be expected, so that more coverage is needed, choosing a higher coinsurance percentage with a reduced rate may be appropriate, so the cost of the added coverage is not proportionate with the amount of added coverage needed.

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While the increased costs associated with rebuilding to current codes might bring a rude awakening, they need not result in an unpleasant surprise for the insured who has experienced a major property loss. Properly planned and placed Ordinance or Law Coverage will help make sure that the full recovery to which the insured believes they are entitled actually takes place.

Paul O. Dudey, CPCU

Associated with the insurance industry for more than 50 years in a variety of roles, Mr. Dudey was associate editor for over two decades of The Fire, Casualty and Surety (FC&S) Bulletins , published by The National Underwriter Company. Earlier in his career, he had worked as a risk analyst, an underwriter and a broker.

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Donald S. Malecki, CPCU

Mr. Malecki is a principal of Malecki Deimling Nielander & Associates, LLC, an insurance and risk management firm. He began his career over 50 years ago and has held the titles of insurance underwriter, broker, insurance company claims consultant, archivist, historian and teacher.


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ADJUSTING TODAY is published as a public service by Adjusters International, Inc., disaster recovery consultants. It is provided for general information and is not intended to replace professional insurance, legal and/or financial advice for specific cases.

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