Industrial Special Risks (ISR) Insurance
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Cover Built For Asset-Heavy Businesses
Businesses with large-scale physical assets need more than standard cover. Industrial Special Risks insurance is designed to protect assets and the financial health of the business in the event of severe disruptions, on an all-risks basis rather than a fixed list of named perils.
Coverscope specialises in arranging ISR cover tailored to the unique demands of Australian operations, giving you confidence that complex exposures are genuinely accounted for.
What Does ISR Insurance Cover?
- All-Risks Structure: Most Australian ISR policies are built on Mark IV, or Modified Mark IV, wording, covering physical loss or damage from any cause unless specifically excluded, rather than a fixed list of named perils.
- Material Damage: Covers physical loss or damage to buildings, plant, machinery, contents, stock, unregistered vehicles, and the property of directors and employees, from fire, storm, theft or accidental damage, unless specifically excluded.
- Business Interruption: Covers lost gross profit, rental income and the extra costs of keeping operations running while damage is repaired.
- Contingent Business Interruption: Extends cover to lost income caused by damage at a key supplier’s, customer’s, or utility provider’s premises, not just your own site.
- Optional Extensions: Burglary, theft of money, glass breakage, machinery breakdown and employee dishonesty can typically be added to the base policy.
Which Businesses Need ISR Cover?
- Manufacturing and fabrication
- Warehousing and distribution
- Health and aged care
- Property and construction groups
- Retail networks and franchises
- Food production and cold storage
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Most ISR Policies Are Built On Mark IV Wording
Australian ISR policies are generally structured around a base wording known as Mark IV, or Modified Mark IV, used across the market by most major insurers. This base form is what gives ISR its broad, all-risks structure, covering physical loss or damage from any cause unless the policy specifically excludes it, rather than only responding to a fixed list of named perils the way a standard business package does.
Public Liability Isn't Included
An ISR policy covers your property and the financial fallout from damage to it, it doesn’t cover a claim from a third party injured on your premises or by your products. Public and products liability sits under a separate policy entirely, and needs to be arranged alongside your ISR cover, not assumed to be bundled in.
Underinsurance Isn't Just About The Dollar Value
Most ISR policies include an average or co-insurance clause, insure for half your true exposure, and a claim can be settled at roughly half, regardless of what you actually lost. But underinsurance isn’t only about the declared value, it also shows up in the indemnity period, the maximum length of time your Business Interruption cover responds. Most policies default to 12 months, which often isn’t enough once council approvals, specialised equipment lead times, and rebuilding your customer base are factored in on top of the physical repair.
Contingent Business Interruption Covers More Than Your Own Site
Modern supply chains mean a loss doesn’t have to happen at your premises to hurt your business. Contingent business interruption cover can respond to lost income caused by an insured event at a key supplier, customer, or utility provider, damage or disruption somewhere else in your supply chain that still stops you trading.
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Complete the form to request a QUOTE. Call us at 1300 900 207 for an immediate response.
ISR Insurance Cover Sections Explained
Material Damage
Covers physical loss, destruction or damage to buildings, plant, machinery, contents, stock, raw materials, unregistered vehicles, and the personal property of directors and employees while on-site, generally on an all-risks basis, meaning cover applies unless the specific cause of loss is excluded in the policy.
Business Interruption
Compensates for lost gross profit, revenue or rental income, plus the additional costs incurred to keep the business trading, such as temporary premises or expedited repairs, following an insured event.
Contingent Business Interruption
Extends the Business Interruption section to cover loss caused by an insured event at a supplier, customer, or utility provider’s premises, recognising that a disruption elsewhere in the supply chain can stop your business trading just as effectively as damage to your own site.
Optional Extensions
Burglary, theft of money, glass breakage, machinery breakdown and employee dishonesty are commonly available as additions to the base ISR structure, tailored to the specific risks of your operation.
What's Not Covered By ISR Insurance?
- Public and Products Liability: Third-party injury or property damage claims sit under a separate policy, not the ISR structure.
- Wear and Tear: Gradual deterioration or age-related decline is treated as a maintenance issue, not an insured event.
- Design or Specification Faults: Losses arising from an error in design or plan, rather than an accidental event, generally aren’t covered.
- Registered Motor Vehicles: Vehicles requiring registration typically sit under commercial motor cover instead.
ISR vs Business Package Insurance
| ISR Insurance | Business Package Insurance | |
|---|---|---|
| Coverage basis | All-risks, covers any cause unless specifically excluded | Fixed list, cover applies only to the perils named in the policy |
| Typical business size | Larger or more complex operations, often multi-site | Small to medium businesses |
| Liability | Arranged as a separate policy | Often bundled in as part of the package |
| Customisation | Built around your specific site and risk profile | Standard, off-the-shelf terms |
FAQ
What is Industrial Special Risks insurance?
A broad-form property and business interruption policy for medium to large businesses with high-value physical assets, generally written on an all-risks basis rather than a fixed list of named perils.
Is "Industrial Special Risks" only for heavy industry?
Not at all, and the name causes more confusion than it should. “Industrial” here just reflects the product’s origins, it has nothing to do with whether your business runs factories or machinery. “Special Risks” simply means the policy is built around your specific asset profile rather than a fixed, off-the-shelf list. Warehouses, retail networks, aged care providers and multi-site businesses are all common users of ISR cover.
What size business needs ISR insurance?
There’s no single fixed national threshold, it varies by insurer, but ISR is generally considered once declared asset values move into the millions, or where a business operates across multiple sites and a standard business package no longer fits.
Does ISR insurance include public liability?
No. Public and products liability is arranged as a separate policy. ISR covers your property and the financial impact of damage to it, not third-party injury or property damage claims.
What happens if I underinsure my assets?
Most ISR policies apply an average or co-insurance clause, meaning a claim payout can be reduced in proportion to how underinsured you are. Reviewing declared values at each renewal helps avoid an unpleasant surprise at claim time.
How long does Business Interruption cover actually last?
Only as long as the indemnity period you’ve selected, commonly 12 months by default, though many businesses choose 18, 24 or even 36 months once they factor in council approvals, equipment lead times, and the time it genuinely takes to rebuild trading back to pre-loss levels.
What is Mark IV wording?
Mark IV, and its common variant Modified Mark IV, is the base policy wording most Australian ISR policies are built from, providing the broad, all-risks structure the product is known for.
Does ISR cover cover damage that isn't at my own premises?
It can, through contingent business interruption, which extends cover to lost income caused by an insured event at a key supplier, customer, or utility provider’s site.
Get in Touch
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Suite 10B, Level 10, 2 Corporate Court, Bundall QLD 4217
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PO Box 7005, Mount Crosby QLD 4306
Our team continues to work remotely but you are welcome to arrange an appointment with one of our consultants.
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