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MARINE | SILENT CYBER In association with Marsh JLT Specialty
The silent cyber debate within the marine sector Silent cyber is not an easy matter for the insurance market and risk managers in the marine sector and all others are not very happy with the way it has been handled by the insurance market. Claire Davey, Broker, Cyber Practice at Marsh JLT Specialty explains how this important topic affects the marine sector and what needs to happen next. The deadline of 1 January has been and gone, and the silent cyber debate continues within the maritime insurance sector. Leading insurers such as Allianz and AIG publicly announced their intention to deal with this tricky matter last year and so the year-end renewal was always going to be a defining moment. The situation had to be clarified for the benefit of all – customers, brokers and insurers. The Marine Insurer | March 2020
It was mandated by Lloyd’s (Y5258), issued in July last year, and recommended by the Prudential Regulation Authority (PRA) that syndicates and insurers clarify the extent of cyber coverage within maritime insurance products. This impacts areas such as P&I, hull and marine, cargo and yachts, in addition to non-marine lines of business. Having completed the 1 January renewal season, and progressing into the first quarter
of 2020, it is timely to highlight the misinformation and confusion in the market regarding silent cyber. One very important fact to note is that Lloyd’s has mandated that syndicates clarify whether they intend to provide cover for losses arising out of a cyber-incident. It has not mandated that cover should be removed. Lloyd’s has not, however, prescribed a particular clause or approach that syndicates should adopt. This is leading to a proliferation of clauses being applied across the London market. Company markets have not been ‘mandated’, only recommended, by the PRA to clarify whether the intention is to provide cover for losses arising out of a cyber incident. This means that they may choose the easy way out for now, and remain silent, as opposed to adopting an appropriate clause. This is not ideal. The preferred approach, from the insured’s perspective, is to adopt a clause which provides affirmative coverage for losses arising out of a cyber-incident. The likelihood of being able to successfully negotiate this clause is largely
