Industrial Special Risks
Why Do You Need Industrial Special Risk Insurance?
As a Business or Commercial Property owner ; in possession of high-value physical assets with market value of $5 million or above, including but not limited to property, machinery, materials, you are liable to face great risks if property damage to assets are not sufficiently covered under your chosen policy.
The main purpose of Industrial Special Risk (ISR) Insurance is to cover the Business or Commercial Property owner for a wide range of damage and loss scenarios associated with the possession of high-value assets by any cause unless and otherwise explicitly excluded in your policy. It is important to note that minimum values differ by Insurer, hence it is strongly advised that you consult your brokerage to determine the most appropriate course of action.
While ISR insurance is usually advisable for medium to large businesses, you might also consider opting for a policy if you are the owner of smaller organisation with high value assets or in loss scenarios where your business might be incur significant increased costs and/or decrease in turnover as a result of the interruption.
What Protection Will An Industrial Special Risk Insurance Provide?
Under an Industrial Special Risks insurance policy, the insurer agrees to cover you against property damage caused to your high-value physical assets and/ or loss scenarios causing business interruption during the Period of Insurance. Covers typically include:
- Loss and/or damage to physical assets including buildings, plants and machinery, raw materials, vehicles and commercial property registered under the Owner or employees.
- Loss of profits, revenue or rentals and/or increased expenses caused by damage to insured property occurred during the nominated indemnity period with a threshold value lower than the value saved in production.
- Loss of profits, revenue or rentals and/or increased expenses caused by contingent damage to property at the premises of suppliers, customers and utilities
- Burglary, theft of money and employee dishonesty
- Accidental damage and glass breakage
- Direct and ancillary costs in relation to replacement of damaged assets.
- Custom fees, excise, duties or compliance fees
- Other related losses that are not addressed under the policy
ISR policies, while broad in coverage, should not be mistaken for an “all risks inclusive” policy. Often, additional property policies like electronic equipment, motor, machinery breakdown insurance might be needed to supplement an ISR policy. We strongly recommend discussing your requisites with your brokerage so they can effectively communicate the necessary covers and cover limits with the Insurer.
It is important to note that ISR insurance is different from Business Insurance. While ISR insurance is usually inclusive of a wider range of covers for loss and risk scenarios, mostly comprising of instances of material damage and business interruption, Business Insurance typically only includes Public and Products Liability and Commercial Motor Vehicles covers – those that are not usually covered under ISR policies.
Definitions of Property include:
- Commercial machinery or equipment damaged as a result of
- processing
- construction, modifications or renovations where the final value of work exceeds $500,000 or 10% of limit liability, whichever is the lesser amount of the two.
- Licensed vehicles, provided this exclusion shall not apply to mobile plants and equipment at the premises and not otherwise insured.
- Money reported lost or stolen from an unattended vehicle, broken storage facility or loss of cash not discovered within 5 working days.
- Land excluding structural developments
- Jewellery, raw materials
- Boilers, pressure valves, economisers, valves and similar apparatuses that require legal documentation for operation
- Property (not including money) in transit
For further clarification, please feel free to reach out to our insurance professionals for a free consultation so we can ensure that you and your business receive the best possible covers.