What an ISR policy
actually covers.
An Industrial Special Risks policy bundles physical property loss with the financial consequence of that loss into one wording. Below are the seven coverage sections that make up most placements, and how each fits the broader ISR structure.
Every ISR placement is built around two primary sections, with extensions and sub-limits negotiated on top.
Section 1 responds to physical loss or damage to insured property at the insured situation. Building, contents, plant, machinery, leasehold improvements, and stock, almost always at replacement cost. Section 2 responds to the financial consequence of that physical loss, replacing gross profit and insured wages for the indemnity period you select.
Around those two sections, a long schedule of extensions and sub-limits caps specific exposures. Theft without forcible entry, money in transit, glass replacement, removal of debris, prevention of access, and machinery breakdown are the ones that show up most often. Get them sized to your operation and the policy responds when something goes wrong. Get them sized off a template and the overall sum insured can look fine while the actual claim falls short.
The coverage sections, one by one.
Click any section to see what it covers, common exclusions, and how the sub-limits typically get tuned for the businesses we place.
Property Damage
Section 1
Building, contents, plant, and stock at replacement cost on an all-risks basis. The physical loss section.
Business Interruption
Section 2
Replaces gross profit and insured wages while you rebuild, with an indemnity period set to your operation.
Machinery Breakdown
Extension
Mechanical and electrical failure of plant, pressure vessels, and refrigeration. Excluded from the base ISR wording.
Theft & Burglary
Sub-limit
Stock, contents, and tools taken following forcible or violent entry, plus theft without forcible entry where endorsed.
Glass Breakage
Sub-limit
Accidental breakage of internal and external glass, branded signage, and shopfront windows at replacement value.
Money & Fidelity
Sub-limit
Money on premises, in transit, in a safe overnight, and loss caused by employee theft or fraud.
Loss of Rent
Extension
Rental income lost while an insured property is being repaired or rebuilt and tenants cannot occupy it.
How to think about which sections you actually need.
Section 1 and Section 2 are the spine. Every ISR placement carries both. The question is the rest. Manufacturers and food processors with serious plant exposure put machinery breakdown on day one. Retailers and hospitality groups need theft without forcible entry, glass, and money sub-limits sized for the way the business actually trades. Commercial landlords need loss of rent. Money and fidelity rises in importance for any business that handles cash, holds client funds, or runs payroll on staff with access to bank accounts.
The combined Section 1 plus Section 2 limit of liability sets the ceiling. The sub-limits sit underneath, capping specific extensions. A sensible placement runs declared values against a fresh quantity surveyor valuation, sets sub-limits to the real exposure rather than the template, and selects an indemnity period that reflects how long it would actually take your operation to come back. 12 months is the default. It is rarely enough for industrial risks.
If you are not sure where to start, the quickest route is a senior broker walking through the structure with you. The ISR market is wide and insurer appetite shifts. Knowing which insurer fits the risk is most of the value.
Want a placement built around your real exposure?
Send a quick enquiry and a senior broker will walk through the sections that matter for your operation. Or go straight to the full proposal if you want it taken to market.