Industrial Special Risks (ISR) Insurance: Broad Protection for Medium to Large Businesses*

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For many Australian businesses, protecting both physical assets and income is critical to long-term stability. Standard business insurance packages are usually sufficient for small enterprises. However, medium to large businesses with significant insurable assets or complex operations often need broader, more flexible protection. This is where Industrial Special Risks (ISR) Insurance applies.

What is ISR Insurance?

ISR Insurance is designed for medium to large businesses, typically where combined insurable assets fall in the $5–10 million+ range, depending on the insurer. This figure includes:

Physical assets – such as buildings, equipment, stock, and contents.
Business interruption exposure – including gross profit, wages, and additional costs of working.

Unlike business packages that are often written on a site-by-site basis, ISR brings all locations together under one policy, so cover reflects the business as a whole.

When Standard Business Insurance May Not Be Enough*

ISR cover is usually considered when a business has:

High-value assets – e.g. facilities, large plants, specialised machinery, or significant stock.
Multiple sites – particularly across states or regions, where consolidated coverage is more efficient.
Complex risk exposures – such as reliance on extended supply chains or operating in higher-risk environments (natural disaster locations)

Because ISR is broader than standard business packages, it helps ensure continuity after major events that might otherwise threaten long-term viability.

EXAMPLE:

Consider a retailer with 14 stores across Australia. Each store carries relatively low stock and contents values, so insuring them individually with separate business pack policies becomes unnecessarily complex and time-consuming to manage. More importantly, this approach doesn’t capture the real risk: a major loss at the central warehouse. If the warehouse were damaged, supply to all 14 stores could be interrupted, causing significant group-wide revenue loss.

An Industrial Special Risks (ISR) policy addresses this by covering the business as a whole. It streamlines policy management, while ensuring business interruption cover is structured at group level—so the business is protected where the greatest exposure lies, without the headache of managing multiple separate policies.

Key Features of ISR Policies*

ISR policies are highly customisable and tailored to each business’s needs. Common inclusions are:

Broad property cover – accidental damage, fire, storm, impact, malicious damage, and similar events
Business interruption cover – protecting gross profit and ongoing expenses when operations are disrupted.
Customisable extensions – such as machinery breakdown, theft, or increased costs of working.
Sub-limits and endorsements – for example, cover for flood (not automatic), theft, glass, money, or machinery breakdown

Considerations When Reviewing ISR Insurance*

Natalia Vanzo (Senior Account Manager , SMART Business Insurance) highlights some important considerations:

Policy Limits – Ensure declared values for property and gross profit are accurate and that the limit of liability is sufficient to cover a maximum total loss at any one site. We often see limits set too low to match a full loss scenario.
Endorsements – Review conditions or exclusions (e.g. fire protection or storage requirements) that may affect coverage.
Sub-limits – Confirm they align with your needs. For example, not all ISR policies include flood or machinery breakdown automatically.
Indemnity Periods – Confirm that business interruption cover realistically reflects recovery timelines. Longer supply chain recovery times or rebuild periods may require more than the standard 12 months.

EXAMPLE:

A prospective client approached us for a quote on their ISR renewal. Their policy specified a limit of liability of $5,000,000 for any one loss. At first glance this seemed sufficient—the cost to rebuild their main factory and office was around $4,000,000. However, once we considered gross profit, contents, and stock, the potential cost of a total loss at that site was significantly higher than $5,000,000.

This demonstrates the risk of setting the limit too low. With ISR, the limit of liability applies to any one loss, so it is critical to regularly review and update it as building values, stock levels, and profits increase.

ISR and Risk Management*

ISR should be part of a broader risk management strategy. Businesses that combine ISR with proactive measures – such as robust storage and housekeeping, fire protection systems, strong security, business continuity planning, and staff training in hazard identification – benefit from both financial protection and reduced risk exposure.

In Conclusion

ISR Insurance is specialised cover for medium to large businesses with insurable assets above $5 million. It provides broader, more flexible protection than standard business insurance packages and is designed to address the needs of organisations with high-value assets, multiple locations, or complex risks.

If you’re unsure whether ISR may be suitable for your business, speak with a qualified business insurance broker.

Disclaimer: The content of this blog article is intended for general informational purposes only and should not be considered as professional advice. While we strive to ensure accuracy, we make no guarantees about the completeness or reliability of the information. For guidance regarding what and how much business insurance cover you need, we recommend consulting with a business insurance broker. Any actions you take based on any information provided here are at your own discretion.