Extra Cost Of Reinstatement
The following claim explains the Extra Cost of Reinstatement Clause found in many Industrial Special Risks and Fire policies.
Pronto’s is a popular, a-la-carte restaurant specialising in fine Italian Cuisine. Bruno owns the business and the double storey Victorian Terrace building from which it is conducted.
On 3 March 2003 a fire swept through the premises severely damaging the building, kitchen and dining facilities.
The risk was insured under a Mark IV Industrial Special Risks policy.
After consultation with his claims consultant Bruno understood that Section 1 of the policy responded to the reinstatement value of damaged property.
Shortly after the fire building surveyors advised that substantial upgrading of the Victorian Terrace was required. These included the installation of signs clearly identifying fire exits, ramps allowing access for disabled patrons, curved skirtings in the kitchen for easier cleaning, to mention a few.
The cost associated with installing these items does not represent reinstatement and replacement of damaged property as signage, ramps and curved skirtings did not exist prior to the fire.
Fortunately, Pronto had cover for Extra Cost of Reinstatement that responded to the upgrading of the property to comply with the requirements of statutory authorities.
Insurance Policy
Country: - Australia
Policy Description: - Mark IV Industrial Special Risks (ISR) policy.
Insurer: - Not Supplied.
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