Page 1 of 44
Ordinance Or Law Coverage Exam 2026–
2027 | Comprehensive Question Practice
Test with Answers & Rationales| Free Pdf
Access
1. Ordinance or Law coverage is triggered by:
a) Theft of building materials
b) Enforcement of building codes after a covered loss
c) Vandalism discovered during routine inspection
d) Flood damage regardless of policy
Answer: b) Enforcement of building codes after a covered loss
Rationale: Ordinance or Law coverage applies when local
building codes require upgrades, demolition, or repair changes
after a covered cause of loss (e.g., fire).
,Page 2 of 44
2. Which ISO form covers the increased cost of construction due
to code enforcement?
a) Business Income form
b) Ordinance or Law form (BP 04 05)
c) Equipment Breakdown form
d) Water backup form
Answer: b) Ordinance or Law form (BP 04 05)
Rationale: ISO’s Ordinance or Law endorsement (BP 04 05 for
commercial property) provides coverage for increased
construction costs, demolition costs, and loss of value to
undamaged portions.
3. The three coverages in Ordinance or Law are often labeled:
a) A, B, C
b) 1, 2, 3
,Page 3 of 44
c) I, II, III
d) X, Y, Z
Answer: a) A, B, C
Rationale: Coverage A = Loss to undamaged portion of
building, Coverage B = Demolition cost, Coverage C = Increased
cost of construction.
4. Coverage A (Ordinance or Law) applies to:
a) Undamaged portion of building required to be demolished
b) Damage to personal property
c) Additional living expenses
d) Debris removal after earthquake
Answer: a) Undamaged portion of building required to be
demolished
Rationale: If codes require tearing down undamaged parts after
, Page 4 of 44
a covered loss, Coverage A pays for the value of that
undamaged portion.
5. Coverage B covers:
a) Replacement cost of contents
b) Demolition costs
c) Trees and shrubs
d) Off-premises utility services
Answer: b) Demolition costs
Rationale: Coverage B specifically pays the cost to demolish the
damaged and undamaged parts of the building as required by
code.
6. Coverage C (Increased Cost of Construction) does NOT
include:
a) Upgrading electrical to current code
Ordinance Or Law Coverage Exam 2026–
2027 | Comprehensive Question Practice
Test with Answers & Rationales| Free Pdf
Access
1. Ordinance or Law coverage is triggered by:
a) Theft of building materials
b) Enforcement of building codes after a covered loss
c) Vandalism discovered during routine inspection
d) Flood damage regardless of policy
Answer: b) Enforcement of building codes after a covered loss
Rationale: Ordinance or Law coverage applies when local
building codes require upgrades, demolition, or repair changes
after a covered cause of loss (e.g., fire).
,Page 2 of 44
2. Which ISO form covers the increased cost of construction due
to code enforcement?
a) Business Income form
b) Ordinance or Law form (BP 04 05)
c) Equipment Breakdown form
d) Water backup form
Answer: b) Ordinance or Law form (BP 04 05)
Rationale: ISO’s Ordinance or Law endorsement (BP 04 05 for
commercial property) provides coverage for increased
construction costs, demolition costs, and loss of value to
undamaged portions.
3. The three coverages in Ordinance or Law are often labeled:
a) A, B, C
b) 1, 2, 3
,Page 3 of 44
c) I, II, III
d) X, Y, Z
Answer: a) A, B, C
Rationale: Coverage A = Loss to undamaged portion of
building, Coverage B = Demolition cost, Coverage C = Increased
cost of construction.
4. Coverage A (Ordinance or Law) applies to:
a) Undamaged portion of building required to be demolished
b) Damage to personal property
c) Additional living expenses
d) Debris removal after earthquake
Answer: a) Undamaged portion of building required to be
demolished
Rationale: If codes require tearing down undamaged parts after
, Page 4 of 44
a covered loss, Coverage A pays for the value of that
undamaged portion.
5. Coverage B covers:
a) Replacement cost of contents
b) Demolition costs
c) Trees and shrubs
d) Off-premises utility services
Answer: b) Demolition costs
Rationale: Coverage B specifically pays the cost to demolish the
damaged and undamaged parts of the building as required by
code.
6. Coverage C (Increased Cost of Construction) does NOT
include:
a) Upgrading electrical to current code
