Reinsurance News

LMA introduces Coronavirus contingency clause

13th March 2020 - Author: Charlie Wood

The Lloyd’s Market Association (LMA) has published policy language designed to prevent customers being left without cover in the event of a Coronavirus-related market shutdown.

LMADrawn up by the LMA on behalf of its members, the clause ensures continuity of coverage for Lloyd’s re/insureds should, for more than one day during the seven business days prior to a scheduled renewal, access to Lloyd’s be prohibited and Lloyd’s Emergency Trading Protocols fail.

“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,” said Patrick Davison, LMA’s deputy director of underwriting.

This move comes amid increasing action from governments worldwide in hopes of halting the virus’ spread and limiting its impact on industry.

Yesterday, Lloyd’s chose to close its underwriting room at 1 Lime Street in London and invoke its Emergency Trading Protocol for 24 hours in order to test for alternatives.

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