New Endorsements Coming Soon
By Sherry Taylor, Manager of Product Development and Support
Anyone who reads industry bulletins or regular news reports will have noticed a significant increase in ransomware attacks worldwide. Additionally, many lawsuits are being filed in the U.S. seeking coverage for claims related to covid-19. In response to these current events, reinsurance companies (both in the U.S. and abroad) are universally adding exclusions to address these exposures into their programs.
As our Marketing team has been advising, WRC will include new exclusions in the 2022 contracts in response to the global reaction to these exposures. Generally, the exclusions clarify that communicable disease and cyber-type claims were never meant to be covered by standard policies.
These mandatory endorsements apply to personal and commercial programs and they address property and liability terms. They will bring current programs in line with the previously mentioned exclusions that will be included in the 2022 reinsurance contracts.
The first part of each amendment adds definitions for communicable disease, computer systems and data. These new definitions are very specific and reflect the language in the exclusions used by global reinsurers, including Lloyd’s of London.
In addition to ransomware-type incidents, a number of other cyber-related exposures are addressed including the Telephone Consumer Protection Act, disclosure of private information, online bullying, corruption of data, and expenses such as those incurred for credit monitoring and forensic investigation.
The communicable disease exclusionary language also addresses failure to report a disease, failure to prevent the spread, failure to test or hiring those infected. Like the cyber-related exclusion, this exclusion also clarifies that associated expenses such as those for cleaning up, detoxifying and neutralizing are not covered.
Along with addressing cyber and communicable disease exposures, the endorsements also resolve some other issues. For example, exclusions for controlled substances and sexual molestation are standardized across all lines. And, when applicable, there is language that excludes coverage for virtual currency of any kind.
In the coming weeks, WRC Mutual Assistance will be posting materials and instructions for adding these endorsements for all current AAIS programs. If you write all lines of business, there will be 13 to be filed and/or added to your systems. Of course, they can be added sooner, so we encourage all client companies to add them as soon as they can be practically worked into policy processing procedures and systems.
There is no premium associated with the endorsements, but they will need to be filed if your company is required by law to do so. (WAMIC will be filing for member companies in Wisconsin.) We have identified a third-party vendor that could handle filings for companies not familiar with SERFF. However, this service may be cost-prohibitive with a minimum of around $300 to $500 per line of business. If you are interested in more information on this option, please call Sherry Taylor.
As always, if any questions arise, please contact a Mutual Assistance team member.