LMA 5567B - VariantWar and Cyber Operation Exclusion (variant, insured carve-out)
Exclusion guerre et opération cyber (variante, garde-fou assuré)
2023-01-18War cyber 2023Type 4No attribution clause
Widest coverage (bystanding write-back) Official text
War and Cyber Operation Exclusion
1. This insurance does not cover that part of any loss, damage, liability, cost or expense of any kind (together "loss") resulting from:
1.1. a War;
1.2. a Cyber Operation that is carried out as part of a War by sovereign states that are parties to the War; or
1.3. a Cyber Operation causing an Impacted State.
Provided, however, paragraph 1.3 shall not apply to a Cyber Operation on a Computer System used by the Insured or its third-party service providers that is not physically located in an Impacted State.
Definitions
The following definitions apply for the purposes of this exclusion only:
Computer system means any computer, hardware, software, communications system, electronic device (including but not limited to, smart phone, laptop, tablet, wearable device), server, cloud infrastructure or microcontroller including any similar system or any configuration of the aforementioned and including any associated input, output, data storage device, networking equipment or back up facility.
Cyber Operation means the use of a Computer System by, at the direction, or under the control of a sovereign state to disrupt, deny access to, degrade, manipulate or destroy information in a Computer System of or in another sovereign state.
Essential Services means services that are essential for the maintenance of vital functions of a sovereign state including but not limited to financial institutions and associated financial market infrastructure, health services or utility services.
Impacted State means a sovereign state where a cyber operation has had a major detrimental impact on:
(1) the functioning of that sovereign state due to critical disruption to the availability, integrity or delivery of Essential Services in that sovereign state; and/or
(2) the security or defense of that sovereign state.
Provided, however, an Impacted State shall not result from an attack, or related series of attacks, solely impacting the Insured.
War means armed conflict involving physical force either:
(1) by a sovereign state against another sovereign state, or
(2) as part of a civil war, rebellion, revolution, insurrection, military action or usurpation of power; regardless of whether war is declared.
[Market notes attached to the variant:
1. The absence of an attribution clause means that, to be compliant, managing agents will have to explain to Lloyd's how they intend to handle attribution.
2. The definition of Impacted State is drafted so that exclusion 1.3 is not triggered where the cyber operation impacts only the insured. Lloyd's will seek to understand the underwriting controls in place.]
Official text LMA ↗Covered scope
As wide as 5567A, with one extra protection for the insured: a cyber loss that hits only the insured cannot be used to establish that a state is impacted, which stops exclusion 1.3 turning against an isolated target.
Excluded scope
War, cyber war operations conducted by states party to the conflict, and any cyber operation rendering a state impacted beyond the insured alone.
Use cases
Worth looking at for high-value targets that fear a state attack aimed squarely at them being re-characterised as an excluded systemic event. The solely impacting the Insured carve-out answers that fear directly.
Limitations
With no attribution clause, Lloyd's compliance assumes an attribution protocol documented up front, as the market notes point out. The exact reach of an attack solely impacting the Insured can be argued where a single target spreads widely.
Context
The no-attribution variant of 5567B, with an insured-protective carve-out added and Lloyd's compliance notes attached.
This material is reproduced and annotated for educational purposes. For any contractual use, refer to the official wordings published by the Lloyd's Market Association and take insurance legal advice. AlgoPolis does not provide legal advice.
Legal disclaimer
English texts are reproduced for educational purposes from official LMA sources.
French translations are unofficial and produced by AlgoPolis for educational purposes only.
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Type classification inferred by AlgoPolis from official Lloyd's definitions, to be confirmed with the LMA.
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