There have been many instances in the past where the property insurance market has responded to events that have contributed significant losses by seeking broad exclusionary language to prevent future incurred losses.

Executive Summary

Commercial opportunities are missed by insurers and reinsurers that respond to the risk of unforeseen losses with exclusions, according to Marsh's Andrew Herring. A case in point is the CL380 clause, with which insurers may deny claims from energy firms for physical loss or damage stemming from cyber-related incidents.

While it is understandable that insurers and reinsurers should seek to reduce exposure to perhaps unforeseen losses, surely a commercial opportunity is also being missed with blanket exclusions becoming the norm?

We could cite transmission and distribution lines as a prime example of this, where exclusions became widespread following a spate of ice storms in North America and European storms including 87J over a few years in the late 1980s and early 1990s. These exclusions eliminated coverage for both property damage and business income losses arising from downed power lines, if the lines were brought down by snow, ice or high winds of winter storms.

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