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CLC insurance terms on cover for cyber events to be clarified

10 May, 2021

Changes that aim to clarify the extent to which cyber-related losses are covered by professional indemnity insurance (PII) have been put forward for consultation by the Council for Licensed Conveyancers (CLC).

The six-week consultation that runs until 18 June is in response to directions from both the Prudential Regulation Authority and Lloyd’s of London to manage ‘silent’ risk by being explicit on whether coverage is provided for losses caused by cyber events.

Other regulators in the legal sector are also working to amend their policy terms and the CLC is among those with a dispensation from Lloyds giving until 1 October 2021 to finalise amendments to the Minimum Terms and Conditions of its PII scheme. These will not affect policies issued this year at the point of renewal on 1 July.

The CLC has worked with specialist lawyers to develop new clause 8.13 for the policy under its Participating Insurers Agreement, which sets the minimum terms and conditions of cover.

The draft clause is not intended to increase the coverage provided for by the agreement; rather, it expressly spells out the cover for cyber-related losses that the existing policy was already understood to offer. As a result, the intention is that it should not affect consumer protection nor insurance premiums.

The range of cyber-related risks covered by the clause include problems with accessing systems; “unauthorised, malicious or criminal” acts; the receipt or transmission of malware, malicious code or similar; and internet failures.

CLC chief executive Sheila Kumar says: “This a is a necessary, and we hope uncontroversial, change to our minimum terms that will provide clarity for lawyers, insurers and consumers alike. Cyber-risks are ever-growing and this consultation forms part of the considerable activity we undertake to alert practitioners to the dangers and ensure that consumers are properly protected.”

The CLC plans to consult on wider changes to its PII scheme following this year’s renewal round.

The consultation, which can be found here, closes on 18th June.


For further information, please contact:

Stephen Ward, Director of Strategy and External Relations,

Kerry Jack, Black Letter Communications, 020 3567 1208