Do not get caught with no cover for standard items under and ISR

It is becoming more common that it ought that a schedule shows that there is no coverage for items which have traditionally been insured under an Industrial Special Risks (“ISR“) policy. Below is an extreme example.

While this has 13 items shown as “Not Insured” it may only be one or two, but these may well come into play at the time of a claim.

Clearly if a client has no gardens or landscaping there is no need to include a sub-limit for this additional item.

However, other items shown in this example are often very important covers to have such as Architects, surveryors and consulting engineers. Even if the insured does not own the building, they may require an engineer to assist with machinery and plant, tenants’ fixtures and fittings and the like.

As ‘Architects fees, surveryors and consulting engineers” are subject to the co-insurance test then it is in my opinion a bit unfair to have yet another test by way of a sub-limit.

Fire extinguishment Costs are another that is often very important to have.

One that cropped up recently was employees clothing and tools of trade. Under many ISR this coverage is altered to “Property of Employees”. Staff of any business often have personal items at work that may be damaged or destroyed by an insured event.

It is estimated that one if four homes in Australia do not have contents insurance the level of no insurance in units and flats is even higher. Even where a employee may be prudent enough to have contents insurance it may well be that the policy provides no coverage for temporary removal. I will not go into whether something left at work all the time is temporarily removed from the person’s home here, but it is also a factor.

Under an ISR policy if the broker or insured elects not to insure these items, consider what premium is saved by stating “not insured” compared to a modest limit.

Anyway it is just a thought.