The Trust understands unique exposures faced by cities and regularly develops new coverages to address ever-changing needs. The Trust’s staff members have expertise needed to address all coverage issues and concerns, giving busy city staff one less thing to worry about. The following coverage changes apply to property/casualty coverage renewing on or after Nov. 15, 2022, and workers’ compensation coverage renewing on or after Jan. 1, 2023.
Cyber war exclusion
The Trust’s first-party cyber coverage contains an exclusion for damages caused by or attributed to war. The exclusion will be broadened to explicitly call out the use of a computer system by or on behalf of a foreign state to disrupt, manipulate, or destroy information in a computer system in another sovereign state. It will also clarify guidelines for determining how and when a cyber-attack is attributed to a foreign state.
First-party cyber coverage clarifications
The following clarifications will be made to the first-party cyber coverage.
- It is the intent for the first-party cyber coverage to apply if a disgruntled employee downloads a virus to a member’s network or acquires and distributes sensitive data owned by the member. In conjunction, a clarification will be placed in the faithful performance bond coverage to coordinate where coverage applies for this type of scenario.
- Explanatory language will be added that defines a “relief association.”
- The definition of “computer equipment” will refer specifically to computer equipment owned or leased by a member.
- The “occurrence” date may include the date of a suspected cyber event.
First responder psychologist exception to professional medical exclusion
The liability coverage has an exclusion for damages arising out of services provided by several types of professionals such as dentists, doctors, pharmacists, and psychologists. There will be an exception for professional psychologist services if the psychologist is working within the capacity of an emergency medical technician, paramedic, or first responder.
Wildfire aggregate limit for liability claims
A $3 million aggregate limit will be incorporated into the liability coverage for damages from claims alleging a member negligently caused a wildfire.
Co-pay for cosmetic damage to metal roofing
A 30% co-pay will now apply for damage to metal roofing that is only cosmetic in nature. (Alters the physical appearance of the structure’s roof but does not result in damage that allows the penetration of water through the structure’s exterior, result in the failure of the structure’s exterior to perform its intended function to keep out elements over an extended period, or otherwise impair the structure’s functionality.)
Asbestos cleanup, abatement, and removal
The property coverage provides a special coverage grant for asbestos cleanup, abatement, and removal under a narrow set of conditions. It is subject to a $250,000 per location limit. The asbestos must be released accidentally and begin and end within 3 days, must not be the result of a planned renovation or demolition activity, and the expenses must be incurred within 90 days of release. The coverage will be clarified to state 1) demolition activities that are part of an otherwise covered loss — fire, windstorm, etc. — do not preclude coverage for the asbestos cleanup coverage; and 2) the 90-day window to incur costs can be extended with approval from claims staff.
Workers’ compensation coverage
Workers’ compensation clarifications
The following clarifications will be made to the workers’ compensation coverage:
- Defense for claims alleging a member discharged, coerced, or otherwise discriminated against any employee in violation of the workers’ compensation law will be moved from the workers’ compensation coverage to the comprehensive liability coverage.
- The term “executive officers” will be replaced with “elected or appointed officers.”
- It will be specifically stated that bankruptcy or insolvency of a member will not relieve the Trust of its obligations under the coverage agreement.
Longshore and Harbor Workers’ Comp Act (LHWCA) exposure
While it is the Trust’s understanding that municipal employees engaged in marina work are eligible for benefits under state workers’ compensation law and not under the LHWCA, the Trust’s coverage is clarified to provide defense for the member if an injured employee tries to assert eligibility under the LHWCA.
Equipment breakdown coverage: automatic coverage for solar generators
For members that purchase equipment breakdown coverage, coverage will automatically apply for equipment breakdown to solar generators, subject to a $100,000 per occurrence sublimit. Equipment breakdown coverage previously excluded solar generators.
Excess liability coverage
Due to a requirement from the Trust’s excess liability reinsurer, there will be two new exclusions in the excess liability coverage. The first is for data security breach claims or any other claim for damages arising out of unauthorized intrusive codes or programming, such as computer viruses or hacking. This exclusion will not impact the primary liability coverage limits for a system security breach claim, which is subject to a $2 million per occurrence limit and $3 million aggregate limit. The second is for claims arising out of or related to Per- and Polyfluorinated Substances (PFAS) substances which are widely used in commercial and industrial applications including metal plating, carpeting, waterproof clothing, upholstery, food paper wrappings, cookware, cosmetics, and firefighting foam. The PFAS exclusion is not specifically called out in the Trust’s primary liability coverage, but there is an existing broad pollution exclusion in primary coverage that generally precludes coverage for this type of claim.
Optional no fault sewer backup and water main break coverage
No fault sewer backup and water main break coverage is an optional coverage that reimburses a property owner for cleanup costs and damages resulting from a sewer backup or water main break, irrespective of whether the incident was caused by city negligence.
The per occurrence limit for no fault sewer backup claims will go from $2 million to $1 million, the per occurrence limit for water main breaks that cause no fault sewer backups will go from $2 million to $1 million, and the aggregate limit for both no fault sewer backups and water main break claims will go from $3 million to $2 million.
Other changes include:
- An exclusion for claims caused directly or indirectly out of unauthorized intrusive codes or programming, such as computer viruses or hacking.
- A clarification this coverage is not intended to cover losses caused by an obstruction or condition in pipes, lines, or infrastructure to which a member’s sewer system feeds.