Property and business interruption

What is Industrial Special Risks (ISR) insurance?

ISR is a form of commercial property and business interruption insurance commonly used for larger or more complex risks. The exact cover depends on the wording, schedule, declared values, sublimits, deductibles and endorsements.

What is business interruption insurance?

Business interruption insurance can cover insured financial loss following covered physical damage, such as loss of gross profit, gross revenue or rent and certain additional costs of working. The basis of settlement and indemnity period are critical.

What is an indemnity period?

The indemnity period is the maximum period for which an insured business interruption loss can be measured after an insured event, subject to the policy. It should reflect realistic rebuilding, replacement, approval and recovery timeframes.

Why do declared values matter?

Declared property and business interruption values influence the amount of cover and can affect underinsurance provisions. Values should be reviewed carefully and professional valuations considered where appropriate.

Read our Commercial Property Insurance page →

Liability insurance

What is the difference between public liability and products liability?

Public liability generally relates to third-party injury or property damage arising from business activities, while products liability relates to injury or property damage arising from products supplied, sold, imported, manufactured or distributed, subject to the policy wording.

Why do importers need to consider products liability?

Importers can face liability exposures associated with products they introduce into Australia. Insurers commonly assess product type, country of manufacture, quality controls, certifications, sales territories, claims history and contractual arrangements.

What is contractual liability?

Contractual liability refers to liability assumed under a contract. Liability policies often contain specific provisions or exclusions relating to assumed liability, so contractual requirements should be compared with the policy wording. Legal advice should be obtained on the contract itself.

Read our Public & Products Liability page →

Professional indemnity

What does professional indemnity insurance cover?

Professional indemnity insurance can respond to claims alleging errors, omissions, negligent acts or failures in professional services, subject to the policy wording. Cover commonly includes defence costs and damages or settlements where insured.

What does claims-made mean?

Many professional indemnity policies are written on a claims-made and notified basis. This generally means the policy in force when a claim is first made and notified is relevant, subject to the retroactive date, prior-known-circumstances provisions and other terms.

What is a retroactive date?

A retroactive date can limit cover for acts, errors or omissions occurring before a specified date. A policy with full retroactive cover may provide broader protection for past work, subject to known-circumstances exclusions and other policy terms.

What is D&C professional indemnity?

Design and Construct professional indemnity is intended for businesses that have both construction and design-related exposures. It may be relevant where a contractor designs, specifies, modifies, coordinates or assumes responsibility for design work, including work performed by consultants.

Read our Professional Indemnity page →

Management liability

What is management liability insurance?

Management liability is a package of covers designed for private companies and their directors or officers. Depending on the policy it may include directors and officers liability, company liability, employment practices liability, statutory liability and crime sections.

How is management liability different from professional indemnity?

Professional indemnity focuses on claims arising from professional services, while management liability focuses on management and corporate exposures. Some businesses need both because the risks are different.

Read our Management Liability page →

Cyber and technology

What is the difference between cyber insurance and technology PI?

Cyber insurance focuses on cyber incidents, data, systems, incident response, business interruption and related liabilities. Technology PI generally focuses on claims arising from errors, omissions or failures in technology products or services. Technology companies may need both.

Does cyber insurance automatically cover social engineering fraud?

Not necessarily. Some policies include cybercrime or social engineering cover, while others apply separate insuring clauses, lower sublimits or specific verification conditions. The policy needs to be checked carefully.

What is dependent business interruption?

Dependent business interruption can provide cover where an insured business is interrupted because a specified supplier, technology provider or other dependency suffers a covered event. Triggers and sublimits vary significantly.

Read our Cyber Insurance page →

Construction and contracting

What is contract works insurance?

Contract works insurance can cover physical loss or damage to construction works, materials and certain temporary works during a project, subject to the selected policy structure and exclusions.

Why do insurers ask about subcontractors and labour hire?

Subcontractor and labour-hire expenditure helps insurers understand the amount of work performed by others, the type of activities outsourced and the potential liability exposure. Insurers may also ask whether subcontractors carry their own insurance.

Read our Construction Insurance page →

Commercial motor and trade credit

What information is usually needed to quote motor fleet insurance?

Insurers commonly require a vehicle schedule, claims history, vehicle use, driver profile, garaging and details of any heavy, prestige or specialist vehicles.

What is trade credit insurance?

Trade credit insurance can protect a business against specified losses arising from customer insolvency or non-payment, subject to approved credit limits, policy conditions, waiting periods and exclusions.

Motor Fleet Insurance →   Trade Credit Insurance →

General insurance questions

What is a sublimit?

A sublimit is a lower limit applying to a particular type of loss or section within a broader policy limit. A policy may have a large overall limit but much smaller limits for specific exposures.

What is an aggregate limit?

An aggregate limit is the maximum amount an insurer will pay for specified claims during the policy period. It differs from an any-one-claim limit, which applies to an individual claim.

What is an excess or deductible?

An excess or deductible is the amount the insured must bear before the policy responds, subject to the policy terms. Different sections of a policy can have different deductibles.

Why are known circumstances important?

Claims-made policies commonly exclude matters known before policy inception that could reasonably be expected to give rise to a claim. Disclosure and continuity provisions can therefore be important when changing insurers.

Why should policies be reviewed together rather than separately?

Commercial insurance programs often contain overlapping definitions, exclusions, contractual obligations and sublimits. Reviewing the program as a whole can help identify gaps between property, liability, professional, management and cyber policies.

Important information

The answers above are general insurance information only. Policy terms differ between insurers and every claim depends on the relevant facts and wording. Mercantile can explain insurance options and policy terms; legal, tax, accounting, valuation or other specialist advice should be obtained from appropriately qualified advisers where required.