12 March 2020

New LMA clause ensures continuity of coverage in case of market closure

London, United Kingdom – 12 March 2020 – The Lloyd’s Market Association (LMA) has today published, on behalf of its members, policy language which will ensure customers’ coverage continues beyond a specified renewal date if the Lloyd’s market is inaccessible, and Emergency Trading Protocol fails. The clause is intended to ensure that (re)insureds will not be left without cover if the developing Covid-19 situation makes normal renewal discussions untenable.

The clause, LMA5392 reproduced below, ensures continuity of coverage for Lloyd’s (re)insureds in the unlikely event that, for more than one day during the seven business days prior to a scheduled renewal, access to Lloyd’s is prohibited and the Lloyd’s Emergency Trading Protocol (available here) fails.

Patrick Davison, Deputy Director of Underwriting at the LMA said, “Although the situation specified is extremely unlikely to occur, the LMA and its members felt it prudent to draft this model clause to ensure that Lloyd’s customers are not left without coverage should the Coronavirus, or any other event, prevent renewal negotiations from taking place.”

LMA5392 – Limited Automatic Extension – Prevention of Access to Lloyd’s of London

  1. In the event that, seven (7) or fewer calendar days before expiration of this contract of (re)insurance, all Lloyd’s Syndicates are prevented from entering Lloyd’s of London, One Lime Street, London, EC3M 7DQ:

    1.1. by the Corporation of Lloyd’s; or
    1.2. following the imposition of quarantine or restriction in movement of people by any national or international body or agency; for more than one (1) business day during the seven (7) days before expiration of the contract of (re)insurance, this contract of (re)insurance shall, in consideration of a pro-rata additional premium, be automatically extended at the existing terms and conditions for fourteen (14) days from the expiration of the contract of (re)insurance.

  2. However, the automatic extension provided under paragraph 1:

    2.1. shall only apply if the (re)insured, their broker or (re)insurers, despite using best endeavours, are unable to implement Lloyd’s Emergency Trading Protocol; and
    2.2. shall not increase or reinstate any applicable limit(s) of liability; and
    2.3. shall only apply once, unless agreed otherwise in writing by (re)insurers; and
    2.4. can be voided by mutual agreement between the (re)insured and (re)insurers. -

- ENDS - 

Notes to Editors

From time to time, the LMA publishes wordings and clauses as models. These models are therefore purely illustrative and are distributed for the guidance of its members, who are free to agree to different conditions or amend as they see fit. The LMA does not publish written guidelines with regard to application or intent of any specific contractual terms (unless use of such contractual terms would constitute a breach or potential breach of any law or regulation) and the LMA therefore cannot release any clause drafting history. The LMA (including all panels and working groups, which may include Joint Committees in conjunction with the International Underwriting Association (IUA)) in drafting such clauses, operates under strict terms of reference to ensure, amongst other things, compliance with Competition Law and it is for underwriters to decide whether or not any contractual language is acceptable on any given risk.

Media relations contacts

James Milne, Communications Director, LMA
Tel: 020 7327 8405; Email:

Richard Adams, Haggie Partners
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About the Lloyd’s Market Association (LMA)

Formed in 2001 and located in the heart of the Lloyd’s Building in the City of London, the Lloyd's Market Association represents the interests of the Lloyd’s underwriting community. All underwriting businesses at Lloyd’s are members, together managing gross premium income of around £31billion per annum.

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