From boutique hotels and fine-dining restaurants to pubs, clubs and function centres, an ISR is designed to cover your premises, equipment, stock and revenue under one wording. It replaces multiple standalone policies with a single broad-form contract, reducing complexity and the gaps that often open up between separate policies.
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Why Hospitality Businesses Need ISR Insurance
The hospitality industry operates in high-risk environments - commercial kitchens, guest accommodation, licensed premises and event spaces - where a single incident can halt trading and damage your brand. Industrial Special Risks insurance provides the broad, all-risks protection that hospitality operators need, combining property damage and business interruption into one policy.
Common Risks Facing Hospitality Businesses
Kitchen Fires
Commercial kitchens with deep fryers, open flames, extraction systems and gas lines are one of the highest fire-risk environments in any business. Kitchen fires can spread rapidly and cause catastrophic damage.
Equipment Breakdown
Failure of commercial refrigeration, HVAC systems, ovens or dishwashers can force partial or complete closure and result in spoilage of perishable food and beverage stock.
Liquor & Food Stock Loss
Hospitality venues hold significant value in food inventory and liquor stock. Damage from fire, water, power outage or theft can result in substantial uninsured losses if cover is inadequate.
Water & Flood Damage
Plumbing failures, burst pipes in guest rooms and storm-related flooding can damage furnishings, carpets, electronic systems and stock - particularly in heritage buildings.
Revenue Interruption
Hospitality businesses earn revenue daily. Forced closure - even for weeks - during peak season or over major events can result in devastating financial losses and loss of bookings.
Vandalism & Malicious Damage
Late-night venues and hotels face risk of patron-caused damage, vandalism and anti-social behaviour that can damage fixtures, fittings and the premises itself.
Recommended ISR Extensions for Hospitality
Extensions commonly negotiated for hospitality risks. Availability and sub-limits vary by insurer.
- Machinery Breakdown
Covers mechanical and electrical failure of commercial kitchen equipment, refrigeration, HVAC and laundry systems.
- Deterioration of Stock
Protects perishable food and beverage stock against spoilage caused by refrigeration or coolroom failure.
- Glass Breakage
Covers replacement of plate glass windows, glass doors, mirrors and decorative glass features common in hospitality fitouts.
- Money Cover
Protects cash, till floats and daily takings at the premises, in a safe or in transit to the bank.
- Prevention of Access
Covers revenue loss when customers cannot reach your venue due to an insured event in the surrounding area - such as a building collapse or gas leak on your street.
Hospitality ISR FAQs
ISR covers business interruption resulting from physical damage to your premises - for example, if a fire forces your venue to close. However, loss of a liquor licence due to regulatory action is not covered under a standard ISR policy. A separate management liability or statutory liability policy may respond to regulatory risks.
A standard ISR policy covers accidental damage to kitchen equipment, but mechanical or electrical breakdown requires a machinery breakdown extension. This is highly recommended for hospitality businesses that rely on commercial ovens, coolrooms, dishwashers and HVAC systems to operate.
If an insured event - such as fire, storm or flood - causes physical damage that prevents you from hosting a booked function, the business interruption section of your ISR policy can cover the lost revenue. However, cancellations due to non-damage causes (such as a pandemic or speaker withdrawal) require a separate event cancellation policy.
Hotels and motels should insure their gross profit over an indemnity period that reflects the time it would take to rebuild or refit the property - typically 18 to 36 months for larger establishments. Consider seasonal fluctuations in occupancy when calculating your estimated gross profit, and factor in the time required to regain your customer base after reopening.
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What ISR sections matter most for hospitality
Coverage
Property Damage
Premises, fit-out, kitchen and stock under one wording.
CoverageBusiness Interruption
Revenue cover while a venue is closed for repair.
CoverageMoney & Fidelity
Daily takings, till floats and staff dishonesty cover.
Case StudyMulti-Tenanted Hospitality Complex, Regional NSW
Structuring ISR for a multi-operator venue.
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