Intangible Risks Insurance Programme Launched for Global Companies
Global companies face a challenging array of risks from reputation and computer system interruption to disruptions of supply chains or outsourced functions, say insurance broker Lockton and Lloyd’s of London insurer Kiln, which are jointly launching a programme offering cover for so-called ‘uninsurable risks’.
Describing the new product, entitled the ‘Lockton Intangible Risk Policy’, Emily Freeman of Lockton’s privacy and global technology practice in London said: “These big boardroom risks previously fell outside of traditional insurance because the cause of loss was not a physical event or did not result in physical injury or damage to tangible property.
“Rather than focusing on physical buildings or inventory, the policy recognises the real value of reputation, computer networks, and intellectual property as a driver of revenue production and investment value.”
Lockton and Kiln have combined to create a multi-peril insurance policy that can be adapted to meet specific client needs. It is being promoted as addressing key areas of risk that were completely uninsured or only inadequately addressed by traditional insurance. The policy is focused on first-party loss of net income and extra expenses. Insurance capacity to at least US$50m is available through the primary lead underwriter and excess markets.
Key perils in the programme include:
Lockton and Kiln offer clients a customised underwriting process to determine the risks and claims settlement processes in advance. Lockton said that it has already developed customised policies for several global companies under the programme.
“Businesses operating today know that their profits are heavily dependent on intangible factors such as brand, intellectual property, computer networks and supply chains,” said Tom Hoad, an underwriter in the enterprise risk division at Kiln. “This new coverage is a direct response to intense demand from risk managers for insurance innovation in these areas.”