What is the purpose of ordinance law insurance when attached to a Commercial Package Policy?

• A. It restores the covered loss to its original condition from many years ago.
• B. It brings construction to current code so the building is eligible for an occupancy permit.
• C. It covers routine maintenance costs.
• D. It reduces premiums by 50%.

Answer: (B)

Ordinance and law insurance on a Commercial Package Policy covers the extra cost to bring a rebuilt building up to current codes and ordinances. When codes change over time, simply rebuilding to the old design may not meet the latest requirements, so this coverage pays the higher construction costs needed to comply and secure the occupancy permit. It’s about upgrading to current code, not about routine maintenance or restoring the exact original condition, and it doesn’t function as a premium discount.