Provision of coverage clarity in respect of cyber exposures - single peril clarification

In Market Bulletins Y5258 and Y5277 Lloyd's set out their requirements for ensuring that customers have clarity on coverage for cyber exposure.

The purposes of this communication is to provide updated guidance in respect of single peril policies.

With regards to single peril policies across both insurance and reinsurance (earthquake, flood or windstorm or a combination of these) Lloyd’s acknowledges that these covers have very specific peril damage triggers. On the basis that these policies will pay for all damage as a result of the insured peril(s) howsoever caused and irrespective of whether a cyber event is linked to the named peril, Lloyd's is satisfied that the managing agent can write this business with no need for the express affirmation of cyber cover in the policy wording.

If, however, the managing agent intends to exclude or limit cyber exposures under these single peril policies they must apply a suitable exclusion wording. The LMA has developed a number of model clauses that can be used in these circumstances. For attestation returns, policies written in line with this approach can be recorded as complying with Lloyd’s guidance.

Patrick Davison
Deputy Director of Underwriting