Insurance broker Lockton has launched a new intangible risks insurance policy, known as Lockton Intangible Risk Policy, in partnership with Lloyd’s insurer Kiln to cover uninsurable risks of companies.
Risks from reputation and computer system interruption to disruptions of supply chains or outsourced functions, which are termed as uninsurable risks, are currently not insured.
Lockton London privacy and global technology practice Emily Freeman said that such risks previously fell outside of traditional insurance because the cause of loss was not a physical event nor resulted in physical injury or damage to tangible property.
"Rather than focusing on physical buildings or inventory, the Lockton Intangible Risk Policy recognizes the real value of reputation, computer networks, and intellectual property as a driver of revenue production and investment value," Freeman added.
The multi-peril insurance policy addresses key areas of risk that are completely uninsured or addressed to a limited extent by traditional insurance.
The policy covers first-party loss of net income and additional expenses.
Lockton said that the new policy with at least $50m of insurance capacity is available through the primary lead underwriter and excess markets.