Lloyd’s of London requires its insurers to exclude or provide affirmative cover for cyber risks.

Insurers connected to Lloyd’s must make sure they do not have unintended exposure to cyber risk.

From the beginning of 2020 underwriters are required to ensure that their property damage policies specifically affirm or exclude cyber cover. This applies to new policies, renewed policies, coverholder arrangements, lineslips and consortia.

In the case of liability and treaty reinsurance, the requirements will come into effect in two phases during 2020 and 2021. Lloyd’s have said that they view policies where no exclusion exists or where there is no express grant of cyber coverage as ‘non-affirmative’. In all these situations action must be taken to provide clarity of coverage for customers.

It may be necessary to introduce cyber exclusions or limits to coverage, but it is not always easy to remove cover already granted.

This is in line with the requirements of the UK Prudential Regulation Authority which we have commented on in previous blogs.