As you have your building(s) insured under the policy, we would like to bring it to your attention to several important issues in the insurance of a building.

1. Co-insurance

With most policies, they are subject to a 90% co-insurance clause, and their coverage is on a replacement cost basis. What it means is that you should insure for at least 90% of the replacement cost (i.e. the cost to replace your building with a brand new building of the like kind and quality). If the amount insured is less than 90% of the replacement cost, you will not be paid 100% of your loss. Following is an example:
You insure for $1,000,000 on a building, whereas the replacement cost of which is $1,500,000; if you have a valid claim of $300,000, you will be paid: $300,000 X 1,000,000/1,500,000 = $200,000.

2. By-law Coverage

If a building is damaged or destroyed by a fire, you may incur extra costs in repairing or re-constructing your building to meet the current by-law requirements of the City. For example, you may have to put in a sprinkler system, or reinforcement in respect of seismic or fire protection. These can be quite costly, particularly if your building is old. You are strongly recommended to take out this by-law coverage.

3. Debris Removal

Debris removal after say a fire, is covered under most policies as far as the amount insured is adequate to include it. Because of the environmental laws today, debris removal can be very expensive. For example, you may have to pay for a specialty company to remove the toxic materials (which might not be considered toxic thirty or forty years ago) from a burnt building.