Following Lloyd’s Bulletins Y5381 and Y5433 confirming Lloyd’s requirements regarding state-backed cyber attack exclusions, the LMA has been offering clause compliance and classification assessments for market participants developing their own clauses. The LMA will continue to provide this service to both members and non-members and new clauses can be submitted for consideration.
The LMA can confirm that the clauses published here were assessed by us as compliant with the Lloyd’s requirements at the time the clause was submitted and have been classified within one of the categories of clauses defined by Lloyd’s. Underwriters should therefore be able to use or follow type 1, type 2, type 3 and type 5 clauses knowing that the cyber language is compliant with the Lloyd’s requirements.
| Clause type | Brief description |
|---|---|
| Type 1 | Excludes all state backed cyber-attacks (war and non-war). |
| Type 2 | Excludes state backed cyber-attacks as part of war and excludes all significant impairment losses for non-war. |
| Type 3 | As Type 2 but does not exclude significant impairment non-war losses which occur outside the impaired state |
| Type 5 | As per Type 2 or Type 3 coverage but the “significant impairment” threshold is addressed by:a) state response by the use of force (whether war is declared or not) and b) broad infrastructure impact (Whether using a single clause or through a combination of clauses). |
As per the information in Lloyd’s Bulletin Y5433, any clause assessed as type 4, type 6 or type 7 will be subject to the clause-specific requirements and oversight approach set out in the clause type notes below.
| Clause type | Brief description | Clause type notes |
|---|---|---|
| Type 4 | As Type 3 but does not exclude state backed cyber-attacks as part of war outside the warring states. | 1. For policies incepting from 1 April 2024 (insurance) and 1 July 2024 (treaty reinsurance), usage only by syndicates who have been assessed as demonstrating “Advanced” capability and only on renewal business and only to the renewing limit (without prior approval). 2. For policies incepting from 1 January 2025 (insurance and treaty reinsurance), usage not permitted. |
| Type 6 | Clauses which have been granted dispensations by Lloyd’s. | Usage permitted until the expiration of the current dispensation. After such dispensation expires, usage not permitted. |
| Type 7 | Non-compliant clauses or no clause. | 1. For policies incepting from 1 July 2024 (insurance), usage not permitted. 2. For policies incepting from 1 January 2025 (treaty reinsurance), usage not permitted. |
The LMA is not providing advice as to whether any of these clauses will be effective as an exclusion or the extent to which a clause will provide coverage or the extent to which it will apply to any particular set of facts. This will, amongst other things, depend upon the applicable law and jurisdiction and also the dispute resolution mechanism selected. It is for underwriters to decide whether or not any contractual language is acceptable on any given risk. If in doubt, underwriters should take their own legal advice to satisfy themselves that a clause is appropriate.