Without doubt, the stars of your theatre insurance policy are your general liability and property coverage.  Think of them as the Lunt and Fontaine of theatre insurance.

However, when reviewing your insurance coverage, it is a good idea to look closely at your supporting cast as well.  These less known elements of your policy can sometimes be crucial in meeting all of your insurance needs.

And like many supporting actors, these smaller insurance parts can sometimes upstage the stars.

DEBRIS REMOVAL   If your theatre is destroyed as a result of a covered cause of loss, your insurance company should pay you the insured limit stated in your policy.  However, before you can begin to rebuild you first have to demolish and remove whatever is left of the destroyed building.  Does your policy pay both the demolition and debris removal costs?  Your AACT policy will pay the cost to demolish and the cost to remove debris up to 25% of the covered loss, plus an additional $50,000.

Lets say your theatre is destroyed by fire.  The insurance company declares the building a total loss and pays you $500,000; the full amount for which you had it insured.  Before you can begin to rebuild, however, you first have to demolish two partial walls left standing and then remove all remaining debris from the site.  Under this example, your AACT policy would pay up to $175,000 for demolition and debris removal.  [$25% of the covered loss plus $50,000].

This is good supporting coverage to have in your policy because it allows you to allocate all of the $500,000 settlement for construction of a new theatre instead of using a portion of it to demolish and remove the old building.

If your building is not a total loss, but instead sustains major damages covered by your insurance, this demolition and debris removal coverage still applies.  The only difference is that the amount paid would be proportionate to the actual loss.
 

ORDINANCE OR LAW   It is almost certain that local ordinances and law have changed since your theatre was built or underwent major renovation.  Higher safety codes such as surge protectors, fire-resistant materials and sprinkler systems, as well as barrier free access requirements for the handicapped, are just some of the current ordinances with which you will have to comply if you rebuild or repair your theatre after an insured loss. If the cost of rebuilding or repairing an insured building has increased because local ordinances or law have established more stringent building codes, will your policy pay for any of the increased cost?  Your AACT insurance policy will pay up to $50,000. for the increased costs due to ordinances or law in effect at the time of loss or damage.

Again, this is great supporting coverage to have because it provides additional revenue with which you can pay for some of the rebuilding or repair costs incurred as a result of a covered loss.

For your information, many communities grandfather new safety requirements so that you do not automatically have to upgrade your theatre every time the safety requirements change.  However, if you have to do major repair work or rebuild your theatre after sustaining a covered loss, you will have to incorporate all safety elements as required by current ordinances.  If you know your existing theatre is drastically out of code, you might want to consider purchasing a higher ordinance and law limit.

FLOOD COVERAGE EXCLUSION   As long as we are talking about supporting coverage, this is a good time to remind you that most commercial property insurance policies do not cover flood damage.  If you are in need of this kind of coverage, you should contact the National Flood Insurance Program toll-free at 800-638-6620.  They can tell you if you qualify for their flood policy.

Whether stars or part of the supporting cast, all the elements of your insurance portfolio, combined, determine the overall effectiveness of your insurance coverage.

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