Blog Question – Differences between the Mark IV and Mark V ISR wordings.
I received this email overnight from the “Ask me a Question” area of the blog.
Hi Prof. Manning,
Wondering if you can help me explain to acolleage the major differences between a (standard) Mark IV and V wording, I understand it is the way in which the policy operates not the more recent
wording that needs to be taken into account.
I would also love to hear your response to a comment from the same person that a base ISR wording is better bcause it has no Sub-limits!
Micheal [surname and email provided]
First up the differences. There are too many to list. I am not sure if you have my Green book on the ISR in your office but if you do, in Volume 3, Aids to Understanding. in there in Part C there is a Schedule of the 200+ differences between the 4 “standard” wordings. You can get the book from http://www.lmigroup.com/content.aspx?artId=63.
Please be aware that some insurers have moved their policy away from the ‘Standard’ creating even more differences and of course check the endorsements.
The issue of standard wordings and Sub-Limits are two different things.
The wordings are now 25 (Mark IV) and 22 (Mark V) years old and are a bit out of date when compared to a good business pack.
The wording is not and was never designed for any one industry let alone a client and so it should be endorsed to include the core endorsements necessary to bring the wording up to
2012, then industry specific wordings and finally risk specific endorsements such as “rent payable” or “heritage listed”.
Any Sub-Limit that restricts a cover automatically covered by the policy naturally limits the cover to the amount of the sub-limit and care must be taken and I suggest from a client’s point of
view the fewer the possible. Most insurers will insist on a Sub-Limit for Removal of Debris and Employees Clothes and Tools of Trade for example. But things like architect fees should not be. I am doing a series on these in my blog which I started only last week see entry for 29 July 2012 http://www.allanmanning.com/?p=1831 and will add to this weekend.
When you endorse a policy to provide an additional benefit that is not standard then a Sub-Limit is often required to allow the underwriter to rightfully charge for the additional risk being
transferred to them.
Please be aware that there are currently over 500 published endorsements to the Mark IV version of the ISR alone. That is why I have been working on an online solution called PolicyCoach which is currently being rolled out to the major cluster groups.
Hope this helps.