ISR Declared Values: Rebuild, Stock & Business Interruption

Key takeaways

• ISR declared values need separate property, stock and interruption calculations.
• Each figure needs an owner, source date, valuation basis and reconciliation.
• Stock peaks and recovery time can make a year-end snapshot incomplete.
• The policy wording determines how declared values and any underinsurance, co-insurance or averaging provision operate. ISR wordings and business pack wordings do not use the same mechanism.

ISR declared values need more than a total asset figure. Rebuild costs, stock or contents, and business interruption use different source documents and calculation methods. Combining them without a reconciliation can hide an error.

Industrial special risks (ISR) declared values are the values supplied for the categories required by the policy and underwriting process. They are not automatically the property’s sale price, accounting book value or finance valuation.

What are the three value groups?

The three groups are property reinstatement, stock or contents, and business interruption. Each needs a clear basis and review date.

Value group	Starting evidence	Reconciliation question
Rebuild and property	Valuation, asset register, building details	Does it follow the policy’s reinstatement basis?
Stock, contents and plant	Inventory, fixed-asset register, peak values	Are ownership, location and seasonal peaks captured?
Business interruption	Financial statements, forecasts and dependencies	Does the calculation match the wording and period?

The three-value reconciliation table below is a preparation tool. It is not a valuation or a statement that every ISR policy uses identical categories.

Tank’s industrial special risks insurance guide explains the wider policy concept. The how ISR policies work page adds structure and terminology.

How should rebuild values be prepared?

Use the valuation basis requested for the policy. Ask whether demolition, debris removal, professional fees, code upgrades, escalation, site access and landlord or tenant improvements are included.

Tank’s sum insured and underinsurance guide explains the broader issue. For ISR, the calculation still needs to follow the specific wording and declared-value schedule.

How should stock and contents be reconciled?

Separate stock from machinery, contents and property held for others. Then identify ordinary, peak and seasonal values at each location.

Useful checks include consignment stock, customers’ goods, raw materials, work in progress, finished goods, spare parts, mobile equipment and assets under finance. The accounting classification may not match the insurance definition.

Record the source date and who owns each value. A year-end figure may not show the maximum exposure during a seasonal peak, but no adjustment should be invented without the underlying records.

How is the business interruption value tested?

Start with the calculation basis required by the wording. The insured figure is usually a policy-defined gross profit, not turnover and not the accounting gross profit line, so check which working expenses the wording treats as uninsured before any figure is declared. Then reconcile it with current financial records, forecast changes and the selected indemnity period. Identify dependencies on sites, utilities, suppliers, customers, specialist plant and approvals.

Do not treat the property rebuild timeline as the only recovery timeline. Recommissioning, replacement equipment, stock rebuilding and customer return can extend the interruption.

The Insurance Council of Australia and National Insurance Brokers Association published a current 2026 averaging provisions fact sheet explaining how declared value can interact with averaging in commercial property and interruption cover. The actual policy clause still controls.

If the programme may sit between structures, Tank’s ISR versus business pack guide helps organise the comparison without assuming ISR is automatically broader.

Frequently Asked Questions

Is an ISR declared value the same as market value?

Not necessarily. The policy sets the required valuation basis, which can differ from sale price or market value.

Should stock use an average or maximum value?

The appropriate basis depends on the wording and business pattern. Disclose and reconcile peak, seasonal and location values.

How is the business interruption value checked?

Reconcile the policy calculation with financial records, trends, the selected period and dependencies, using professional input where appropriate.

How can Tank help reconcile the schedule?

Tank Insurance can help organise the three value groups and compare them with the wording and schedule. Contact Tank Insurance on 02 9000 1155 or email [email protected].