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March 10, 2016  

 
 Q&A of the Week
Increased Cost of Construction Coverage for Tenant's Improvements and Betterments

We have an insured tenant presenting a claim under BP 00 03 01 10 for upgrades required when repairing covered property. The damage is to an Ansul system and hood vent. A cooking fire caused damage to various parts of the system because of a malfunction. The system was installed by the insured as an improvement years ago. The code now requires an upgrade to type of system used. There is no building coverage in the policy. Does the increased cost of construction additional coverage apply to the improvements and betterments even though the policy says the coverage "applies only to buildings" insured at replacement cost? Does the ordinance or law exclusion apply to the upgrade costs?

ANSWER: The form is pretty specific in stating that the increased cost of construction additional coverage applies only to buildings insured on a replacement cost basis. Since your insured does not carry building coverage, this additional coverage would not apply. On the other hand, the ordinance or law exclusion is broader and applies to "any property," which means it would apply to the insured's Ansul system and hood vent. The cost for upgrades would not be covered.
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 What's New This Week in FC&S
Livestock Coverage

In the current farm program of Insurance Services Office, coverage for livestock may be written under the Livestock Coverage Form, FP 00 40 02 09. Read More
 
 Litigation Watch
Houses as Advertisement

The insurer filed a declaratory judgment action against an architecture firm seeking a declaration that it had no duty to indemnify for a copyright infringement. This case is Mid-Continent Casualty Company v. Kipp Flores Architects, 602 Fed.Appx. 985 (2015).

Kipp Flores obtained a judgment against a builder, Hallmark Design Homes for copyright infringement for building hundreds of buildings from its designs without licensing them. Hallmark's insurer, Mid-Continent, filed a declaratory judgment action seeking a declaration that it has no duty to indemnify under its policies. The U.S. District Court ruled in favor of the architecture firm and this appeal followed.  
Read More
 
 Fraud of the Week
Arson – Connecticut
AMOUNT: Unknown


A Brookfield woman was sentenced to twelve years in prison for setting fire to her mother's home in order to collect the insurance money. Read More
 
   
 FC&S Ask the Experts
Did you realize that the Q&A section of FC&S is made up of questions submitted by subscribers like you?

Paid subscribers to FC&S Online or print FC&S Bulletins are invited to submit insurance coverage questions to the editors. We'll provide a personalized opinion within five business days. (We'll let you know if it will be longer than that. Sometimes we have to gather research or other supporting materials).

Who knows? Your question may be featured (anonymously) in the online Q&A of the Week or as an FC&S update.

Submit your coverage interpretation question right to the editors of FC&S for quick and reliable information. Ask our expert staff a question by clicking here.
 
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FC&S editors regularly conduct web-based demos of the service. Feel free to contact Christine Barlow, cbarlow@alm.com, to set one up! They only take 30 minutes, a small investment of time that will help you learn all that FC&S Online has to offer.
 
 Contact Us
As always, your comments and questions are welcome.

Contact us at:
FC&S Department
Phone: 800-543-0874
Fax: 859-692-2293
Email: eAlerts@nuco.com
The Zalma Insurance Claims Library
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Insurance Claims: A Comprehensive Guide
The only source you'll need to successfully handle insurance claims from start to finish. More Info
Construction Defects Coverage Guide
Your single-source for identifying, insuring, investigating, prosecuting, and defending cases that result from construction defect claims. More Info
Mold Claims Coverage Guide
This guide will allow you to handle mold insurance claims and litigation resulting from mold or fungi related disputes with confidence. More Info
For more information about these titles Click Here
 
FC&S Team
Kelly Maheu, J.D.
Publisher
  Diane W. Richardson, CPCU
Consulting Editor
Christine G. Barlow, CPCU
Managing Editor, FC&S
  Diana B. Reitz, CPCU, AAI
Consulting Editor
David D. Thamann, J.D., CPCU, ARM
Managing Editor, FC&S Bulletins
  Emily Brunner
Online/Print/Production Editor
Susan L. Massmann, CPCU
Managing Editor, Electronic Publications
  Tosha Brinkman
Marketing Manager
Barry Zalma, Esq., CFE
Contributing Editor
  Donna Cozatchy
Creative Director

 
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