Lloyd’s Market Association has introduced an endorsement that “ensures [physical] theft remains a covered peril under marine cargo policies” when related to a cyber breach, according to Salt Marine Risks.

The underwriting agency, a Lloyd’s coverholder, says the evolution of cargo theft has been dramatic, particularly in the past few years as crooks use increasingly sophisticated methods.

“This makes theft far less traceable, meaning these attacks often go undetected until the goods have completely vanished,” Salt said.

“This convergence of cyber and physical risk meant there was a pressing need for traditional insurance wordings written and designed for the pre-digital era to catch up and align with today’s evolving risk landscape.”

Salt says the LMA’s endorsement “addresses the growing risk of cyber-enabled theft in cargo transport and clarifies that the marine policy still covers theft as a physical act, distinguishing it from pure cyber-related losses”.

Clause 4 of the endorsement is key, the agency adds. “It confirms that if a cyber event enables access but human intervention is required to physically remove goods, the theft remains covered.

“This is a practical solution for a complex risk scenario. It restores the intent of cargo policies: theft is a physical peril, and coverage should reflect that.”

Salt says it will introduce the clause to all its marine cargo policies, schedules and supporting documents.

“We will also apply the expanded cover retrospectively to any claims arising under existing policies where the circumstances are relevant.

“As technology evolves exponentially, policy language must keep pace.”

See the endorsement here.