Monday 21 October 2019

Lloyd's of London calls for insurance policies to spell out cyber cover

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Noor Zainab Hussain

Lloyd's of London wants all insurance and reinsurance policies to clearly state whether coverage will be provided for losses caused by a cyber attack, saying this is in the best interests of both brokers and customers.

Lloyd's plays a key role in international insurance as its market matches insurers with those seeking cover for risks ranging from oil rigs to soccer stars' legs. It said all policies must provide clarity on cyber insurance by either excluding or definitely providing cover.

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Lloyd's action follows on from a recommendation by Britain's financial watchdog, the Prudential Regulation Authority, which wrote to insurers in January saying they should have plans to reduce the unintended exposure which could be caused by unclear cyber cover. A coordinated global cyber attack, spread through malicious email, could cause economic damage anywhere between $85bn (€75bn)and $193bn, a hypothetical scenario developed as a stress test for risk management showed earlier this year.

Cyber attacks have been in focus after a virus spread from Ukraine to wreak havoc around the globe in 2017, crippling thousands of computers and disrupting ports from Mumbai to Los Angeles. Governments have repeatedly warned about the risks private businesses face from such attacks, both those carried out by foreign states and financially motivated criminals.

Lloyd's, a specialist insurance and reinsurance market, which includes 80-plus syndicates, said its underwriters should ensure that all policies starting in 2020 for first-party property damage make the status of cyber cover clear.

For liability and treaty reinsurance, the requirements will come into effect in two phases during 2020 and 2021, Lloyd's, which began life in Edward Lloyd's coffee house in 1688, said.

Reuters

Irish Independent

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