What’s the difference between an Industrial Special Risks policy and a Business Pack policy?
An Industrial Special Risks policy is an “All-Risks” property policy in that it is intended to cover all property damage at the insured situation except that which is specifically excluded. This means that it provides a very broad level of cover. Whilst the base wording is standard in theory, over the last twenty years there have been numerous additional clauses written, called Endorsements, which further enhance or clarify the cover. It is therefore essential that you have an insurance adviser that thoroughly understands the cover so that your policy can be properly structured. Today it is standard in the industry to have over 50 endorsements added to or incorporated into the wording.
Importantly, there are two main covers offered by an Industrial Special Risks policy: 1) Material damage and 2) Business Interruption. Property damage covers such as fire, storm, damage to glass, burglary etc are all automatically incorporated into the material damage section and you simply need to elect what limit you require. However, covers such as Public & Products Liability and Commercial Motor cannot be included on an Industrial Special Risks policy and need to be placed separately.
Industrial Special Risks policies are as a rule only offered by insurers for policies covering more than $5,000,000 of physical assets and business interruption combined. Whilst different insurers will have their own guidelines, generally speaking Business Pack policies do not have upper or lower limits of asset values.
Conversely, Business Packs generally include Public & Products Liability and many now also offer a Commercial Motor Vehicle section. Unlike the Industrial Special Risks policy, with a Business Pack policy you need to opt in to the covers that you wish to have i.e. if you want Burglary cover you need to specifically choose it. You are only therefore covered for the specific types of cover you have chosen. As a result, Business Packs generally offer a lesser degree of cover than Industrial Special Risks policies.
SUMMARY
- Industrial Special Risks policies usually provide a broader level of cover as they essentially cover everything except that which is excluded; Business Packs only cover what you have chosen
- Industrial Special Risks policies are usually only offered where assets are over $5,000,000; Business Packs generally do not have upper or lower limits
- Industrial Special Risks policies only cover property damage and business interruption; a range of other covers can be packaged into a Business Pack policy such as Public Liability and Commercial Motor