Lloyd’s Launches Parametric Policy For Business Interruption

Insurance and reinsurance marketplace Lloyd’s of London has launched a new business interruption policy for small and medium sized enterprises (SMEs) that uses a parametric trigger to protect against IT disruption or downtime.

The new product, called Parametrix Insurance, is led by Tokio Marine Kiln (TMK) and supported by other members of Lloyd’s Product Innovation Facility, including RenaissanceRe.

It removes the traditional indemnity trigger used by most policies and instead relies on parametric triggers that automatically pay out if a customer’s critical IT services are disrupted.

This could apply to services such as cloud, e-commerce or payment systems, Lloyd’s suggested, with the aim being to significantly reduce the time insurers spend assessing a loss or adjusting a claim.