I am a public adjuster and trying to interrupt a Builders Risk policy correctly. The policy is attached. The loss location is "Location 0002 - Building 0001." The Declarations lists coverages for Building Materials - Replacement Cost, Existing Building Limit-Actual Cash Value and, Catastrophe Limit.
The loss that I'm working on is a project involving an Existing Building that the insured was preparing to renovate. Before the renovation project even started, there was a severe fire loss. The loss will exceed the policy limit for Existing Building. There were no Building Materials on site so the claim is limited to the Existing Building coverage.
The coverage that I am not certain about is the Catastrophe Limit.
The building is a total loss to insurance carried ($350,000.00). Will the Catastrophe Limit provide coverage for the loss amount in excess of $350,000.00 but not to exceed the Catastrophe Limit of $1,180,000.00? If not, can you please explain why and the intent of a Catastrophe Limit?
The catastrophe limit cannot be used to override the limit that applies to an existing building. The policy clearly states that the existing building limit is the most that will be paid in a single occurrence for loss to an "existing building". The catastrophe limit comes into play when in a single loss occurrence any or all of the following applies: in addition to the existing building there is loss involving both building materials and the existing building; the loss affects more than one jobsite; or there are coverage extensions or supplemental coverages that apply over and above the limit that applies to either "building materials", "existing building" or "job sites". For example, if the existing building loss had pollutant cleanup and removal expenses of say $5,000, those expenses would be covered within the catastrophe limit over and above the limit that applies to "existing building".