Material Damage is the section of an Industrial Special Risks policy dealing with physical loss, destruction or damage to insured property.

What property can be insured? #

Depending on the policy, this can include:

• Buildings.
• Contents.
• Machinery.
• Plant.
• Equipment.
• Stock.
• Raw materials.
• Finished goods.
• Fixtures and fittings.
• Other insured business property.

The property insured should be accurately described and valued.

What events can cause an insured Material Damage claim? #

ISR policies are generally written on a broad damage basis rather than simply listing a small number of insured events.

However, exclusions still apply.

Examples of events that may cause physical damage include:

• Fire.
• Storm.
• Impact.
• Accidental damage.
• Escape of liquid.
• Certain natural hazards.

Whether a particular event is insured depends on the wording and schedule.

Why are accurate values important? #

The amount declared for buildings, contents, machinery and stock can affect the amount recoverable following a claim.

Businesses should regularly review asset values, particularly following:

• Renovations.
• New equipment purchases.
• Property acquisitions.
• Significant increases in stock.
• Inflation or increases in rebuilding costs.

Underinsurance can materially affect a claim.