What Is ISR Insurance? A Plain-English Guide for Property Owners

If you own commercial property in Australia, you’ve probably heard the term ISR thrown around. Maybe your broker mentioned it. Maybe an insurer said your building “needs to go ISR.” And you nodded along while quietly thinking - what does that actually mean?

You’re not alone. ISR insurance is one of the most misunderstood products in the market, mostly because no one bothers to explain it properly.

Let’s fix that.

Key Takeaways:

• ISR works on an all-risks basis - it lists what’s excluded rather than what’s covered
• Designed for properties valued over $5M, complex buildings, or risks declined by mainstream insurers
• Premiums range from $2,400 to $80,000+ depending on property complexity
• ISR is property-only - liability is arranged separately
• You need a specialist broker because ISR underwriters don’t deal with the public

What Is ISR Insurance, Actually?

ISR stands for Industrial Special Risks. It’s a type of commercial property insurance that works on an “all risks” basis.

Here’s the key difference. A standard property insurance policy covers named events - fire, storm, theft, and whatever else is listed. If it’s not on the list, you’re not covered.

ISR flips that approach. Rather than listing what’s covered, it lists what’s excluded. So instead of a list of what’s in, you get a list of what’s out. The exclusion list is generally shorter than the inclusions list on a standard policy, which typically means broader protection.

That means broader protection and fewer gaps in most cases. It’s a fundamentally different approach, and for complex properties, it’s often the more appropriate option.

What Does an ISR Policy Cover?

Because ISR works on an all-risks basis, the cover is wide. But here’s a rough breakdown of what’s typically included:

• Property damage - fire, storm, impact, water damage, malicious damage, and just about anything else that can go wrong with a building
• Business interruption - loss of income while the property is being repaired or rebuilt
• Loss of rent - if your tenants can’t occupy the building and stop paying rent
• Machinery breakdown - electrical or mechanical failure of plant and equipment
• Glass breakage - shopfronts, windows, and glass features
• Theft - forced entry, burglary, and in some cases employee dishonesty
• Money - cash on premises or in transit

One thing to be clear about. ISR is property-only. It doesn’t include public liability or any other liability cover. That gets arranged separately. This is actually a good thing because it means each part of your insurance is properly tailored rather than bundled into a one-size-fits-all package.

When Do You Need ISR?

Not every property needs ISR. If you own a standard office or retail shop worth under $5M with boring tenants and no flood exposure, a business pack will do the job.

But there are five common triggers that push a property into ISR territory:

1. Your building is valued over $5M. Most mainstream business pack products cap out somewhere between $5M and $10M. Once you’re above that, ISR is usually the only option with proper capacity.

2. Mainstream insurers have declined your property. If two or three standard insurers have said no, it’s not the end of the road. ISR markets regularly pick up properties that packaged products won’t touch.

3. You’ve got complex tenancy. Mechanics, food manufacturers, hospitality venues, auto electricians - these tenant types create risk that packaged products aren’t designed for. ISR underwriters assess them individually.

4. Your property is in a flood or cyclone zone. Standard insurers either exclude these perils or price them out of reach. ISR markets have more flexibility to include flood and cyclone cover at a workable premium.

5. You own multiple properties. A multi-property portfolio can often benefit from an ISR policy. You get one policy, one renewal, and usually better pricing than insuring each property separately.

If two or more of those apply, ISR is worth a conversation.

How Much Does ISR Cost?

This is the question everyone asks, and the honest answer is - it depends. ISR premiums vary massively based on the property.

Based on recent placements (individual results vary), the range looks like this:

• $2,400 for a simple warehouse in good condition
• $15,000 for a Western Sydney industrial property with standard tenancy
• $35,000 for a multi-tenanted retail and commercial complex
• $80,000+ for a flood-zone mixed-use property in Northern NSW

Seven factors that drive ISR pricing:

1. Building sum insured (replacement value)
2. Construction type (concrete vs timber vs metal)
3. Tenancy mix and what they do
4. Location and natural hazard exposure (flood, cyclone, bushfire)
5. Fire protection (sprinklers, hydrants, extinguishers)
6. Claims history
7. Age and condition of the building

For a deeper dive into what drives the numbers, check out our ISR insurance cost guide.

ISR vs Business Pack - The Short Version

People often ask how ISR compares to a standard business pack. The short version:

• Business packs bundle property and liability together. They cover named perils, they’re automated products, and they work well for straightforward risks.
• ISR is property-only, covers all risks, and each policy is individually underwritten by a specialist.

Business packs are great for what they’re designed for. But they have limits - literally. When your property is too complex, too valuable, or in the wrong postcode, a business pack either won’t cover it properly or won’t cover it at all.

We’ve written a full breakdown in our ISR vs business pack comparison if you want the detailed version.

How ISR Placement Works

ISR doesn’t work like buying a business pack online. There’s no quick-quote button. Here’s what actually happens:

Step 1: Your broker prepares a submission. This includes construction details, tenancy schedule, fire protection info, flood mapping, claims history, and photos. The more detail, the better the result.

Step 2: The submission goes to specialist underwriters. These aren’t the mainstream insurers you see advertised on TV. ISR markets include names like Ocean, Halo, Axis, and Lloyd’s syndicates. They assess each property individually.

Step 3: Quotes come back. Turnaround depends on complexity. A straightforward warehouse might get quoted in a few days. A flood-zone mixed-use complex with 12 tenants could take one to two weeks.

Step 4: Your broker reviews the terms. Not all ISR quotes are equal. Excesses, sub-limits, conditions, and exclusions vary between markets. A good broker compares these properly rather than just looking at the headline premium.

This is why you need a broker who actually knows ISR. These underwriters don’t deal with the public, and the submission quality directly affects the terms you get.

Do You Need ISR?

Here’s a quick checklist. If you tick two or more, it’s worth having a conversation about ISR:

• Your building is valued over $5M
• You’ve been declined by mainstream insurers
• Your tenants include trades, food, or hospitality
• Your property is in a flood, cyclone, or bushfire zone
• You own three or more commercial properties
• Your current premium feels too high for what you’re getting
• You’re worried about underinsurance gaps in your cover

If any of that sounds familiar, get in touch. We’ll have a look at your property, tell you whether ISR makes sense, and if it does, we’ll handle the placement from start to finish.