Gourmet Foods Ltd. operated a food service out of a new concrete-and-steel building. Food preparation was performed on stainless steel tables, and all sinks, stoves, and food containers were metal. Perishable food ingredients were kept in large walk-in commercial refrigerators or freezers.

Gourmet Food Ltd. took out an insurance policy to cover for any loss relating to fire, theft, vandalism, and damage to stock. The building and contents had an actual value of $800,000, but because of the building's largely fire proof construction, they felt any loss would only occur to a value of $400,000. Despite the 80% co-insurance clause they insured the building for $400,000.

Some months later, after business hours, vandals broke into the building and caused damage to the refrigeration units, emptied the freezers, and destroyed food products. Before the police arrived the vandals were gone.

The damage was estimated at $110,000. The insurance company is refusing to pay the entire amount of the loss. What is the main legal issue? If Gourmet Foods Ltd sued for compensation for the full loss would they receive it? If not, how much are they entitled to receive from the insurance company?