CLC launches cyber insurance consultation
The Council for Licensed Conveyancers (CLC).has launched a consultation aimed at clarifying the extent to which cyber-related losses are covered by professional indemnity insurance (PII).
The six-week consultation is in response to directions from both the Prudential Regulation Authority and Lloyd’s of London to manage ‘silent’ risk by being explicit on whether coverage is provided for losses caused by cyber events.
The consultation, which can be found here, closes on 18th June.
The CLC has worked with specialist lawyers to develop a new clause 8.13 for the policy under its Participating Insurers Agreement, which sets the minimum terms and conditions of cover.
The draft clause is not intended to increase the coverage provided for by the agreement; rather, it expressly spells out the cover for cyber-related losses that the existing policy was already understood to offer. As a result, the intention is that it should not affect consumer protection nor insurance premiums.
The range of cyber-related risks covered by the clause include problems with accessing systems; “unauthorised, malicious or criminal” acts; the receipt or transmission of malware, malicious code or similar; and internet failures.
Other regulators in the legal sector are also working to amend their policy terms. The CLC is among those with a dispensation from Lloyds giving until 1 October 2021 to finalise amendments to the Minimum Terms and Conditions of its PII scheme. These will not affect policies issued this year at the point of renewal on 1 July.
CLC chief executive Sheila Kumar says:
“This is a necessary, and we hope uncontroversial, change to our minimum terms that will provide clarity for lawyers, insurers and consumers alike. Cyber-risks are ever-growing and this consultation forms part of the considerable activity we undertake to alert practitioners to the dangers and ensure that consumers are properly protected.”
The CLC plans to consult on wider changes to its PII scheme following this year’s renewal round.