The Lloyd’s Market Association (LMA) has published a contingency clause to temporarily extend coverage for policyholders if the market is forced to shut down due to the coronavirus (COVID-19) pandemic.
The policy language or the wording under the clause is intended to ensure that the policyholders are not left without cover in case the coronavirus situation worsens.
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Wording published under the clause ‘LMA5392’
The insurance premium for policyholders will be automatically extended for 14 days if the insurance contract is set for expiration before seven or fewer calendar days.
This is applicable to all of Lloyd’s employees who are prevented from entering Lloyd’s of London, at One Lime Street, London.
The policy is also applicable to people in quarantine or restrictions.
However, the clause will be applied only if the reinsured, their broker or reinsurers, are unable to implement Lloyd’s Emergency Trading Protocol (ETP).
The extension is applicable only once and will not increase or reinstate any applicable limits of liability and can be voided by mutual agreement.
The clause is for guidance purposes only and is not binding.
LMA underwriting deputy director Patrick Davison said: “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.”
The wording follows Lloyd’s of London decision to shutter its underwriting floors on Friday for the first time in history.
All Lloyd’s Market Association staff to work remotely
LMA is shuttering its office on Gallery 4 of Lloyd’s building starting March 17 as its entire workforce has been asked to work from home.
LMA stated: “We recognise that this is a different way of working – we are fully equipped and prepared to continue working as close to usual as possible with the London Market.”
Additionally, all LMA events and academy programmes have been postponed until the end of April.
