NMA 2914 and NMA 2915 (Electronic Data Endorsements A and B)
Two London market endorsements from 2001 that take loss of electronic data out of property policies; both give back physical damage from a resulting fire or explosion, and B limits media valuation to blank media.
Long before silent cyber, the London market asked whether data is property. Its answer dates from January 2001: two endorsements for property policies, NMA 2914 (Electronic Data Endorsement A) and NMA 2915 (Electronic Data Endorsement B). Both take out of cover the loss, alteration or corruption of data and software, whatever the cause, viruses included, and the resulting business interruption. Both then give back the same thing: if the harm to data causes a fire or an explosion, the only two perils on their list, the resulting physical damage is paid. They part ways on the valuation of media. A pays the cost to repair, replace or restore the media. B sticks to the value of blank media plus the cost of copying back from backup, never what the data was worth to the business. These two forms sat for twenty years in thousands of policies. They excluded data well enough, but said nothing about physical damage caused by an attack, and that is where Y5258 found its material in 2019. LMA 5400 and 5401 replaced them on London programs; they are still found in older policies and in treaties that incorporate them by reference.
Hypothetical: in 2018, a virus corrupts the control system of a glassworks furnace insured with NMA 2915. The furnace overheats and a fire destroys the line. The insurer pays for the line, physical damage caused by fire. It declines to rebuild the lost production recipes: it owes only the cost of blank media and copying, and the backup was six months old.
NMA 2914, NMA 2915, NMA2914, NMA2915, Electronic Data Endorsement A, Electronic Data Endorsement B
Follow the research
One letter a week. First, the week's underwriting note, when one is published: a dated, argued decision, signed by Paul Bernardski. Then what the observatory published on cyber risk, political risk and insurance. No account, no tracking.
No spam, one-click unsubscribe, no data ever sold.