Ordinance Law Coverage Calculator

Ordinance and law coverage pays code-required upgrades after loss.

Building replacement cost

Code upgrade cost %

O&L coverage limit

Deductible %

Net coverage available

$4,560,000

Total upgrade cost

$6,600,000

Deductible

$440,000

How the math works

Upgrade cost = replacement × %. Net = min(limit, upgrade) − deductible.

$22M × 30% = $6.6M upgrade vs $5M limit. Min $5M − $440k deductible = $4.56M net coverage.

How to Use

Enter building replacement cost.
Enter code upgrade cost %.
Enter O&L coverage limit.
Enter deductible %.
Read net coverage.

Frequently Asked Questions

Coverage scope?

Coverage A: undamaged portion (demolition required for code). Coverage B: demolition cost. Coverage C: increased cost of construction (bring entire rebuild to code). Typical O&L covers 25-50% of building value.

When critical?

Pre-1978 buildings (asbestos). Pre-1991 (ADA). Pre-2003 (sprinklers in some categories). Historic properties (preservation codes). Heavy retrofit zones. Without O&L, owner pays 100% of code upgrades from pocket.

Typical upgrade costs?

Fire sprinkler retrofit: $4-8/SF. Seismic retrofit: $20-60/SF. ADA compliance: $15-45/SF. Energy code compliance: $5-20/SF. Accumulated over 40+ years can be 20-50% of replacement cost.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.