Which exclusion is associated with post-loss costs for code upgrades under BOP?

Which exclusion is associated with post-loss costs for code upgrades under BOP?

• A. Flood exclusion
• B. Earthquake exclusion
• C. Machinery breakdown exclusion
• D. Ordinance or Law exclusion

Answer: (D)

The post-loss costs to upgrade a building to current codes after a loss are excluded by the Ordinance or Law exclusion. This exclusion specifically bars coverage for the enforcement of building codes or laws and the increased costs to repair or replace to meet those codes. In a Businessowners Policy, you won’t be paid for those added costs unless you have the Ordinance or Law endorsement that provides this coverage. The other exclusions—flood, earthquake, and machinery breakdown—address different perils or causes of loss and do not relate to the extra costs caused by code requirements.

The post-loss costs to upgrade a building to current codes after a loss are excluded by the Ordinance or Law exclusion. This exclusion specifically bars coverage for the enforcement of building codes or laws and the increased costs to repair or replace to meet those codes. In a Businessowners Policy, you won’t be paid for those added costs unless you have the Ordinance or Law endorsement that provides this coverage. The other exclusions—flood, earthquake, and machinery breakdown—address different perils or causes of loss and do not relate to the extra costs caused by code requirements.