The Institute Cyber Attack Exclusion clause, more commonly known as Clause 380, is included in most marine insurance covers. It states that: “...in no case shall this insurance cover loss-damage liability or expense directly or indirectly caused by or contributed to by or arising from the use or operation, as a means for inflicting harm, of any computer, computer system, computer software programme, malicious code, computer virus or process or any electronic system.”
Clause 380 was introduced to insurance policies due to the potential for unknown aggregation which cyber risks uniquely pose. As we move ever more deeply into the “Internet of Things”, where devices are all connected to some extent, this clause is becoming even more relevant. Any one attack / virus / malware could potentially affect many different vessels, regardless of their respective location, simultaneously. At the same time, such an event could have serious implications for the insurer concerned.
Both insurers and ship owners should be aware of the cyber risks we face. Without knowing where your exposures are, how would you protect yourself? In order to avoid any ambiguity, BIMCO recommends that cyber risks should either be explicitly included or explicitly excluded in insurance policies. As of 1 January 2020, Lloyd's will require the same from its syndicates. In addition, IMO resolution MSC 428 comes into effect 1 January 2021. To comply, cyber-risk management will have to be addressed and incorporated in the ISM code.
Norwegian Hull Club created its cyber cover for two main reasons: 1) to assist our clients with a specific gap in their insurance cover, and 2) to increase the focus on a risk we see as more and more relevant. Over the years, we have seen an increased interest in the product from ship owners in many different segments. We have also seen other insurance providers developing cyber-related products. This indicates that cyber risks are being taken seriously across the industry and we fully expect this trend to continue.
'Needs of our clients'
Previously, our Clause 380 Buy-Back product had an annual aggregate limit of USD 300 million. However, as our portfolio continues to expand, we now see the need to increase this annual aggregate to better cater to the needs of our clients. We are therefore pleased to announce that the limit has been increased to USD 500 million. This will apply to all new policies, and all policies which commenced in 2019.
For more information, please contact your underwriter or firstname.lastname@example.org.
16. Oct. 2019