ISR Insurance vs Property Insurance: What’s the Difference?

When it comes to protecting your business assets, two common types of insurance come up: industrial special risks insurance and Property Insurance. While both provide coverage for physical assets, they differ significantly in scope, flexibility, and suitability. Here’s a clear breakdown of how they compare:

1. Scope of Coverage

• ISR Insurance:
  • Designed for large businesses with multiple locations or high-value assets.
  • Offers broad, all-risk coverage under a single policy.
  • Covers physical loss or damage from almost any cause (unless specifically excluded).
  • Typically includes buildings, contents, machinery, and stock, plus optional extensions like business interruption.
• Property Insurance:
  • More limited and specific in scope.
  • Often provides named-perils coverage (fire, theft, etc.).
  • Requires separate policies or riders for additional locations or types of coverage.

2. Policy Structure

• ISR Insurance:
  • Standardized wording under the ISR Mark IV wording (in Australia and similar systems).
  • One consolidated policy covering various risks and properties.
  • Can be tailored with endorsements or optional covers.
• Property Insurance:
  • Typically multiple separate policies depending on the assets and risks.
  • Customization is limited, and adding extras increases cost and complexity.

3. Ideal For

• ISR Insurance:
  • Businesses with insured asset values generally over AUD $5 million (or equivalent).
  • Multi-location enterprises, industrial sites, manufacturers, and large commercial operations.
• Property Insurance:
  • Small to medium businesses with single locations or limited assets.
  • Retail shops, offices, and local service providers.

4. Cost Efficiency

• ISR Insurance:
  • Can be more cost-effective for large enterprises due to consolidated premiums and broader protection.
• Property Insurance:
  • Usually cheaper upfront for small businesses but less value per dollar when needing extended protection.

5. Customization & Flexibility

• ISR Insurance:
  • Highly customizable.
  • Includes optional sections like machinery breakdown, theft, flood, and business interruption under one umbrella.
• Property Insurance:
  • Customization often requires multiple add-ons.
  • Less flexible and more administrative work for policyholders.

Conclusion

Bottom Line:
If your business is large or growing fast, ISR Insurance is the better option due to its comprehensive and consolidated protection. For smaller, simpler operations, Property Insurance may suffice—just be aware of its limitations.