ADJUSTERS INTERNAT IONAL . COM 9 A D J U S T I N G T O D A Y C. Increased cost of repair or reconstruction of the damaged and undamaged facility on the same or another site and limited to the minimum requirements of such law or ordinance regulating the repair or reconstruction of the damaged property on the same site. Coverage is extended to include the amount of actual or necessary loss you sustain during the increased period of suspension of operations. However, the company shall not be liable for any increased cost of construction loss unless the damaged facility is actually rebuilt or replaced. The insureds contended that because the inspection was triggered by the fire and resulted in the enforcement of the building Currently, this kind of an issue is less likely to warrant the insured’s efforts to litigate. This is because insurers have clarified their increased cost of construction coverage provisions to spell out what they are and are not going to pay. Rebuilding at Another Location When an increased cost of construction coverage provision gives the insured the option to rebuild on another site, the following questions arise: How much can the insured obtain to implement code upgrades? Is the amount limited to what the insured would have received if it repaired or rebuilt the existing property — or some other amount code, the fire was the cause of the enforcement of the building code. The court disagreed. In doing so, it stated that although the violations might have remained undiscovered if not for the fire, the violation in question existed independent of the fire, and therefore the fire could not be said to have caused the enforcement of a building code. Finally, although the phrase reading “increased cost of repair or reconstruction of the damaged and undamaged facility” acknowledged some liability to portions of an undamaged facility, this liability, the court explained, was limited to repair or reconstruction; that is, not upgrading per se. …insurers have clarified their increased cost of construction coverage provisions to spell out what they are and are not going to pay. “ ”
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