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It's exactly the same concept as a resistance test with a multi-meter, it just uses 500v dc not (probably) 9v. It can be thought of as a pressure test to confirm the condition of the cable and effectiveness of the insulation between the cores / armour. Any sparks worth their salt would do this test before considering re-energising the circuit. (you obviously aren't anywhere near that stage yet)Out of curiosity though, how would an insulation resistance test work and would it help me locate the break? Or just confirm the damage exists?
As Tel said if you were indeed measuring the actual fault with a multi-meter then it's a very low resistance fault indeed. An IR+continuity test device (most Megger BM devices do both) can measure resistance very accurately (to roughly hundredth of an ohm), much more accurately than most low-mid range multimeters where the good ones do +- 0.2 ohms.
So it would help confirm the cable's integrity and (best case) gain an idea where the issue is.
I do expect you to need a sparks at some point. It would be nice if you can find where the issue is though.