ADJUSTERSINTERNATIONAL.COM 7 For our purposes here it is important to note that standard commercial ordinance/law coverage endorsements allow insureds to extend the building property limit to cover the loss of an undamaged part of a structure that must be destroyed to comply with building regulations. (This presumes the demolition requirement is triggered by damage to part of the structure by a covered peril.) In addition, standard commercial ordinance/ law coverage endorsements allow insureds to establish their own limits for the actual demolition and increased cost of construction necessitated by compliance with building regulations. Thus, adequate coverage for ordinance/law exposure depends upon: • The overall building property limit; and • The endorsement limits for demolition and increased cost of construction. Blankets, Schedules and Coinsurance For a commercial account with properties at multiple locations, whether coverage is adequate at the time of loss may depend on whether those properties are insured on a blanket or scheduled basis. Under blanket coverage a single limit applies to any insured damage at any insured location; under scheduled coverage a separate limit is determined for each location. If a blanket limit is at least roughly equivalent to the sum of proposed scheduled limits, blanket coverage provides a greater hedge against being WHAT TO WATCH FOR Are scheduled limits adequate to cover each scheduled property? Is a blanket limit sufficient to avoid a severe coinsurance penalty after a loss?
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