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ABC Computers experiences a fire overnight at their corporate offices. ABC Computers had purchased an older building to house their offices, and the repair costs include upgrading the old building to adhere to modern fire codes. Which coverage might indemnify ABC Computers for the added expense of these upgrades?

a. Legal Liability coverage
b. Builders Risk coverage
c. Ordinance or Law endorsement
d. Extra Expense coverage

1 Answer

4 votes

Final answer:

The Ordinance or Law endorsement is the coverage that would likely cover the extra costs of upgrading the old building to meet modern fire codes after a fire at ABC Computers.

Step-by-step explanation:

The coverage that would indemnify ABC Computers for the added expense of upgrading their old building to adhere to modern fire codes is the Ordinance or Law endorsement. This type of policy modification is designed to cover the extra costs associated with rebuilding or repairing a structure to meet the latest building codes after a covered loss.

Legal Liability coverage typically addresses third-party claims against your business for damages; Builders Risk coverage is for protecting buildings under construction, and Extra Expense coverage helps with additional costs of running the business after the insured event, but doesn't address building code upgrades specifically.

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