2026 Coverage Changes

The following coverage changes apply for coverages renewing on or after Jan. 1, 2026, and are provided at a summary level.

Cyber coverage restructure

LMCIT has restructured its cyber coverage under a new agreement called Municipal Cyber Risk Coverage. It will replace the existing municipal first-party cyber coverage and a portion of third-party cyber coverage currently included in the Comprehensive Municipal Liability Coverage. While the new coverage agreement offers the same coverage and limit options as the current coverage, it is structured to align with industry norms and introduces several key updates:

• Broadened protections: It expands coverage for dependent network interruptions, benefiting members who contract with outsourced data centers or cloud providers if the contractor’s system is compromised.
• DoS attacks covered: The new agreement explicitly covers denial-of-service (DoS) attacks that disrupt services.
• Revised PCI and regulatory fines limit: Payment Card Industry (PCI) and regulatory fines will be subject to $2 million per occurrence limit under third-party (liability) coverage.
• Deductibles: The standard deductible for cyber claims will increase from $250 to $1,000. Note: Beginning in 2027, members will be subject to a $5,000 deductible if they do not conduct annual employee cybersecurity training.

Diagnostic testing coverage expansion (workers’ compensation coverage)

Currently, the coverage includes diagnostic testing for employees who have been exposed to bloodborne pathogens, such as HIV or hepatitis. The new addition to this coverage will also include the costs for antiviral medicine prescribed to these employees.

Electric vehicle charging stations (property coverage)

LMCIT has added electric charging stations to the definition of “property in the open.” This change will make it easier for members to schedule and cover electric vehicle charging stations.

Increase in demolition and debris removal limits (property coverage)

The limit for demolition and debris removal for noncovered property will increase from $50,000 per occurrence to $100,000 per occurrence. An example of noncovered property is downed trees or debris from a tornado or windstorm landing on the premises of covered property.

Removal of sewer backup deductible (liability coverage)

A minimum deductible of $2,500 currently applies to members who do not have basic sewer maintenance and operation protocols in place. Following additional analysis, LMCIT has decided to apply the member’s standard liability deductible.

Increase in med pay limits (liability coverage)

The current limit for medical payments (Med Pay) is $2,500 per claimant and $10,000 per occurrence. Med Pay covers medical expenses for individuals who are injured on the member’s property, regardless of who is at fault. The new limit will increase this coverage to $5,000 per claimant and $20,000 per occurrence.

Terrorism aggregate limit and exclusions (liability coverage and excess liability coverage)

There will be a new $3 million aggregate limit for terrorism-related liability claims in the Comprehensive Municipal Liability Coverage. This means the total limit for terrorism-related liability claims will be capped at $3 million for the coverage term. Additionally, the excess liability coverage will exclude terrorism claims involving nuclear, chemical, biological, or radiological weapons.

Clarification for charter commissions (liability coverage)

The current definition of covered individuals includes members of city boards, commissions, or committees. The change will explicitly include charter commission members in this definition.

Expansion of fraudulent instruction claims limit (crime coverage)

Under crime coverage, a fraudulent instructions loss happens when an employee is tricked into sending money to a criminal, believing the request came from a coworker or a trusted business contact. This usually involves a scammer asking the employee to change a vendor’s bank account details so the next payment goes to the criminal instead of the vendor.

The standard coverage limit for this type of loss is $50,000 per incident. However, with the coverage change for 2026, if the member uses a call-back procedure — verifying the request with a known contact or phone number already on file, not one provided in the email — the limit increases to $250,000 per incident.