Product Update

New ISO Cyber Incident Exclusion Endorsements (EB 10 01, BP 15 60, and BP 15 61) Analyzed in Commercial Property insurance

This release to Commercial Property Insurance addresses the introduction of a new mandatory cyber incident exclusion endorsement, Cyber Incident Exclusion (EB 10 01), to the Insurance Services Office, Inc. (ISO), equipment breakdown policy. It also expands the discussions of the ISO cyber incident exclusion endorsements for use with the ISO businessowners policy to address concerns about their possible effect on the businessowners policy's equipment breakdown optional coverage.

ISO Equipment Breakdown Cyber Incident Exclusion Endorsement

Beginning in June 2021 in a majority of jurisdictions, ISO equipment breakdown program rules require the attachment of the Cyber Incident Exclusion (EB 10 01) endorsement to all equipment breakdown policies. 

This release provides a discussion and specimen copy of this new mandatory endorsement, which excludes loss or damage "caused directly or indirectly" by a cyber incident, with no ensuing loss exceptions. It would prevent coverage under the ISO equipment breakdown coverage form if, for example, a cyber criminal managed to gain control of the insured's electronic equipment and damage it.

ISO Businessowners Policy Cyber Exclusion Endorsements and Equipment Breakdown Optional Coverage

ISO businessowners program rules effective in February 2021 in most jurisdictions require the attachment of one of two cyber incident exclusion endorsements to all policies: either the Cyber Incident Exclusion (BP 15 60) endorsement or the Cyber Incident Exclusion with Ensuing Cause(s) of Loss Exceptions (BP 15 61) endorsement. This release expands the discussions of these two endorsements to address concerns about their possible effect on the equipment breakdown protection optional coverage of the ISO businessowners policy.