LMA publishes cyber clauses to meet Lloyd’s requirements and clients’ coverage needs
The Lloyd’s Market Association (LMA) has produced several model clauses to help members provide clarity about cyber coverage under first-party property damage policies...
The clauses, produced in close collaboration with the market, are the first in a series designed to meet Lloyd’s requirements and client coverage needs. Lloyd’s market bulletin (Y5258) mandates that there is clarity regarding cyber coverage by either excluding or providing affirmative coverage.
Patrick Davison, LMA’s deputy underwriting director said: “There is strong support in the market for the need to address evolving cyber risks and exposures. The Lloyd’s underwriting communities have invested significant time and effort in the drafting of these new clauses which seek to bring terminology up to date and clarify the coverage position to the benefit of insureds and underwriters.”
The clauses provide a starting point for the market to address the constantly evolving cyber risks in the property, marine and energy markets. They include:
- LMA5400 – Property D&F Cyber Endorsement
- LMA5401 – Property D&F Cyber Exclusion
- LMA5402 – Marine Cyber Exclusion
- LMA5403 – Marine Cyber Endorsement
Lloyd’s view, that it is in the best interests of insureds, brokers and syndicates for all policies to explicitly articulate the extent of cyber coverage, mirrors that of the PRA, which in January wrote to insurers about the need for action to reduce the unintended exposures that can arise from non-affirmative cyber cover.
The LMA will publish further line-of-business-specific model clauses in the coming weeks.