How ISR Policies Work

An ISR policy isn't one big block of cover. It's divided into sections, each covering a different type of loss. This modular structure is one of the things that makes ISR so flexible.

The main sections are:

Section 1 - Property Damage

This is the core of the policy. It covers physical loss or damage to your building, contents, stock, plant, and machinery on an all risks basis. We'll explain what "all risks" actually means in the next section.

Section 2 - Business Interruption

Covers the financial impact when property damage disrupts your operations. This typically includes loss of gross profit, increased cost of working (the extra you spend to keep trading), and loss of rent if you're a landlord.

Additional Sections

Beyond the two main sections, ISR can include cover for machinery breakdown, glass, theft, money, and electronic equipment. Each section carries its own limits and sub-limits tailored to your situation.

One important thing to understand: ISR is property-only. It doesn't include liability cover. Liability insurance for the building and property is always arranged separately.

This is the fundamental difference between ISR and standard commercial property insurance.

Standard property insurance lists what's covered. These are called named perils - fire, storm, impact, and so on. If the event that damaged your property isn't on the list, you're not covered.

ISR works the other way around. It lists what's excluded. Everything else is covered.

That sounds like a small difference, but it's huge in practice. The exclusion list on an ISR policy is generally much shorter than the inclusions list on a standard policy. So the scope of cover is significantly broader.

If you want to see a direct comparison, our ISR vs Business Pack guide breaks down the differences side by side.

ISR policies can be tailored using endorsements - additions or modifications that adjust the standard wording to suit your specific property and circumstances.

Common endorsements include:

Natural Hazard Cover

Flood cover can be added even in high-risk zones through specialist underwriters. Earthquake cover is also available as an endorsement in seismically active areas.

Cost Protection

Removal of debris, professional fees for architects and engineers after a loss, temporary protection costs, and escalation clauses for building cost increases between the time of loss and rebuilding.

Automatic Extensions

Automatic additions for new property acquisitions during the policy period. This means if you buy another building mid-term, it's covered from day one up to a specified limit.

Your broker should review endorsements at each renewal to make sure the policy still reflects your property. Situations change - tenants move in and out, valuations shift, and new risks emerge. An endorsement that was right two years ago might not be right today.

Getting the sum insured right is one of the most critical parts of an ISR policy. Get it wrong and your claim payment gets reduced - even if the claim itself is valid.

ISR uses replacement value. That's what it would cost to rebuild your property from scratch, including demolition, council approvals, professional fees, and construction costs at current prices. It's not the market value and it's not the purchase price.

We recommend a professional replacement cost valuation every three years at minimum. Through the Steadfast network, we can refer you to valuation specialists who understand commercial and industrial properties.

At each renewal, we also check whether your sums insured need adjusting for construction cost movements. Building costs have moved significantly in recent years, and policies that haven't been updated can be well out of date.

ISR isn't an off-the-shelf product. Every policy is individually underwritten. Here's what the process looks like from start to finish.

Step 1 - You Provide Property Details

Sum insured, construction type, tenancy details, fire protection systems, and location. The more detail upfront, the better the submission.

Step 2 - Broker Prepares the Submission

Your broker packages everything into a detailed submission designed to present the risk properly. This is where experience matters - how a risk is framed makes a real difference to the response.

Step 3 - Submission Goes to ISR Underwriters

Not automated systems. Actual underwriters who review the risk, assess the exposures, and price it based on their experience with similar properties.

Step 4 - Underwriters May Request More Info

Valuations, flood reports, compliance certificates, photos - underwriters sometimes need additional information before they can finalise terms.

Step 5 - Quotes Come Back

Each quote includes the premium, excesses, any specific conditions or warranties, and endorsements. Your broker compares the options.

Step 6 - You Choose, Broker Binds

You pick the best option based on cover, price, and insurer quality. Your broker binds the policy and arranges the documentation.

Turnaround is typically a few days for straightforward risks. Complex properties - flood zones, unusual construction, difficult tenancies - can take one to two weeks as underwriters work through the detail.