What is ISR Insurance and How May it Protect Your Business Assets? *

Industrial Special Risks (ISR) Insurance is a comprehensive insurance policy designed to cover larger or complex businesses with assets over $10,000,000. In some cases, there are small ISR options available for businesses with assets totalling $5,000,000. An ISR Insurance Policy has two main sections of cover – material damage and business interruption. Each ISR Policy is different and will include sub-limits for theft, money, glass cover, accidental damage and sometimes machinery breakdown.

Key Features of ISR Insurance*

1. Material Loss or Damage – Covers the replacement of the buildings, contents, and stock due to physical damage such as storm, fire, malicious damage.
2. Business Interruption – Protects the businesses from the financial losses caused by damage to the insured property.
3. Burglary, Theft of Money – Covers your contents, stock and money if there is a burglary.
4. Accidental Damage – Covers the building, contents and stock in the event of accidental damage occurring.
5. Glass Breakage
6. Machinery Breakdown

How ISR Insurance May Protect Your Business Assets*

ISR insurance plays a significant role in providing financial protection for businesses, ensuring operational continuity even after disruptive events. By covering both direct property damage and financial losses, it may help businesses recover without enduring excessive financial strain.

For instance, if a manufacturing facility sustains fire damage, an ISR policy might cover the costs of repairing the building, replacing damaged machinery and addressing lost income due to operational downtime. This integrated approach can provide peace of mind and financial stability in challenging circumstances.

ISR Insurance all protects property owners with many commercial properties, where total property value is over $10,000,000. The business interruption section of cover will protect the property owner against loss of rent in the event of damage to the property. Insuring the properties on an ISR policy sometimes can be more cost effective than having a separate policy for each property.

Things to Consider When Evaluating ISR Insurance*

Natalia Vanzo (Senior Account Executive, SMART Business Insurance), notes some things to look out for when reviewing your ISR Insurance Policy include:

Policy Limits: Understand your coverage to avoid gaps. Ensure your sum insured covers asset replacement (building, contents, stock) and that your gross profit figure is accurate—check with your broker if unsure how to calculate it. Make sure your limit of liability for any one claim is sufficient to cover the physical assets and loss of income in the event of a maximum total loss at any location on your policy.

Policy Endorsements: Endorsements can significantly impact your coverage, so review them carefully. They may impose conditions or exclusions, such as storage or fire protection requirements.

Sublimits of Cover: Review sublimits to make sure they meet your needs. Not all ISR policies include machinery breakdown coverage, so if you need it, check that it’s included. Also, review other limits such as theft and additional increased cost of working to ensure they are sufficient. It’s important to note that Flood cover isn’t automatically included, so advise your broker if you require flood coverage.

Conclusion*

ISR insurance may be a valuable option for medium to larger businesses seeking to safeguard their assets and maintain resilience in the face of unexpected events. Its broad coverage and flexibility provide options that suit diverse industry requirements.

For detailed information and to explore suitable insurance coverage for your business, consulting with an experienced business insurance broker is recommended.

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.