Lloyd's Market Association Bulletin

LMA21-042-PD | 25 November 2021

Cyber War and Cyber Operation Exclusion Clauses

The LMA Cyber Business Panel has drafted the following clauses:

  • LMA5564 - War, Cyber War and Cyber Operation Exclusion No. 1

  • LMA5565 – War, Cyber War and Limited Cyber Operation Exclusion No. 2

  • LMA5566 - War, Cyber War and Limited Cyber Operations Exclusion No. 3

  • LMA5567 - War, Cyber War and Limited Cyber Operation Exclusion No. 4

In discussion with Lloyd’s it has been agreed that, in respect of standalone cyber insurance policies, these clauses meet the requirements set out in the Performance Management - Supplemental Requirements & Guidance (July 2020) which state that all insurance and reinsurance policies written at Lloyd’s must, except in very limited circumstances, contain a clause which excludes all losses caused by war.

Four clauses have been drafted to provide Lloyd’s syndicates and their (re)insureds (and brokers) with options in respect of the level of cover provided for cyber operations between states which are not excluded by the definition of war, cyber war or cyber operations which have a major detrimental impact on a state.

When deciding which clause to use on an individual placement (whether LMA5664 – LMA5667, a variation thereof or any other appropriate war clause), underwriters should consider the coverage provided, their outwards reinsurance wording and the resultant impact on exposures across the portfolio. 

As with all LMA model clauses, these clauses are purely illustrative and are distributed for the guidance of LMA members, who are free to agree to different conditions or amend as they see fit. The clauses are available on the Lloyd’s Wordings Repository (LWR), which can be accessed via www.lloydswordings.com.

Patrick Davison
Underwriting Director