Industrial Special Risks Insurance
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Industrial Special Risks Insurance — Comprehensive Cover for Industrial Sites
Key Facts
- Core ISR sections: material damage (all‑risks), business interruption, machinery breakdown
- Optional extensions: environmental/pollution, delay in start‑up, civil authority, increased cost of working
- Covers plant, machinery, stock, finished goods, boilers, compressors and control systems
- Suitable for manufacturing, processing, utilities, refineries, food & beverage and heavy industry
- Australia‑wide placement with specialist industrial underwriters and technical claims support
Who needs ISR
- Manufacturers and processors (food, metals, chemicals, plastics)
- Heavy industry: foundries, steelworks, fabrication and large workshop operations
- Utilities and energy producers (small generation plants, renewable projects)
- Large warehouses and distribution centres with high stock values
- Mining processing plants, quarries and bulk handling facilities
- Pharmaceutical, biotech and high‑tech production sites with costly plant
Core covers explained
- Broad physical damage cover for insured property—plant, machinery, buildings, stock, raw materials and work in progress—caused by accidental events unless specifically excluded.
- Agreed values or reinstatement basis can be used for key plant to reduce settlement disputes
- Replaces gross profit, increased cost of working and continuing fixed costs lost while production is suspended due to an insured physical loss.
- Indemnity periods and waiting periods should reflect realistic repair and restart timelines for industrial plant.
- Covers sudden and unforeseen mechanical or electrical breakdown of boilers, compressors, turbines, generators and control systems—often with specialist repair and spare parts sourcing assistance.
- Protects PLCs, SCADA, control panels and IT systems whose failure can halt production—often including physical damage, software corruption and cyber‑related physical loss triggers where endorsed.
- For new projects, DSU covers financial losses from delayed commissioning due to insured physical damage prior to start‑up; critical for capital projects and plant expansions.
- Covers third‑party clean‑up costs, remediation and legal defence for sudden pollution incidents caused by insured operations; essential in chemical, fuel or waste‑handling sites.
- Protects perishable stock (food, pharmaceuticals) against spoilage due to refrigeration failure, contamination or insured power losses.
- Covers movement of plant or materials between sites and storage while in transit or at approved off‑site locations.
- Pays reasonable extra costs to expedite repairs or maintain production (e.g., hiring temporary plant, overtime labour, airfreight for parts) to reduce indemnity period losses.
Key underwriting considerations & premium drivers
- Plant criticality and single point of failure risks (how one machine stoppage affects entire production)
- Age, maintenance history and inspection regimes for major plant
- Safety systems, redundancy, spare parts holdings and onsite technical capability
- Location risks: flood, bushfire, storm, earthquake exposure and access for repairs
- Inventory management, value of work in progress and finished goods stock levels
- Past claims history and downtime events, plus civil works and construction activity on site
- Revenue dependency on continuous operation and contract penalties (liquidated damages)
How Bracesure structures ISR programs
Operational audit:
We review plant lists, critical machinery schedules, maintenance logs, P&IDs, and business interruption exposure (gross profit or gross revenue).
Technical placement:
We approach insurers and engineering underwriters with technical schedules, maintenance regimes and testing records to obtain appropriate wording and limits.
Market approach
We source options from insurers specialising in landlord programs and strata/commercial property risks
Policy structuring
We combine building, rent loss, liability and legal expenses into a cohesive program that meets mortgagee and tenant contract needs.
Documentation
We issue certificates of currency for mortgagees and tenants and provide clear policy schedules
Claims advocacy
We support fast claim lodgement, evidence collation and insurer negotiation to restore premises and cash flow quickly.
Lease & contract considerations
- Clearly document whether tenants are required to insure their fit‑outs and contents. Ambiguity can create disputes after a loss.
- Ensure lease clauses require tenants to maintain appropriate public liability and provide certificates of currency.
- Consider requiring tenants to notify you of alterations and installing approvals to control risk from tenant worksshfire or cyclone
Practical risk controls to protect value & reduce premiums
- Regular building maintenance and documented inspection logs
- Tenancy fit‑out approvals and licensed trade usage
- Security upgrades (CCTV, lighting, access control) in high‑risk areas
- Clear lease provisions for repairs, insurances and tenant responsibilities
- Prompt action on tenant arrears and strong tenant screening procedures
Typical policy exclusions & watch points
- Wear and tear, gradual deterioration and poor maintenance
- Wilful damage by tenants may be limited or require proof of tenant action
- Certain statutory fines and penalties may be excluded
- Flood and earthquake often have separate underwriting or sublimits — confirm specific wording
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Frequently Asked Questions (FAQs)
It depends on the lease. If the fit‑out is landlord‑owned or the lease requires landlord insurance, include it; otherwise tenants commonly insure their own fit‑outs and contents.
Some policies cover rent loss due to insured damage rendering the property uninhabitable; cover for tenant default or deliberate vacancy is less common and varies by insurer.
Yes — strata/body corporate policies cover common property; landlords should coordinate cover with strata and insure landlord-owned items separately.
Not always — flood and storm cover depend on policy wording and location; high‑risk properties may require specific flood arrangements.
Yes — many landlord policies include malicious damage, but insurers may require tenant screening and security measures
Building construction details, sums insured, tenancy schedule, lease copies, security measures and recent claims history.
Simple single‑site quotes: 24–48 hours. Multi‑site portfolios or high‑risk properties: 48–72 hours for tailored terms.