There is no specific exclusion of cyber risks under normal P&I club rules. However, some traditional exclusions can apply. War risks are perhaps the best example. Rupert Banks of Charles Taylor P&I, managers of Standard P&I Club explores the issues.
P&I liabilities are excluded from club cover where they are incurred as a result of, “any hostile act by or against a belligerent power, or any act of terrorism”, since these constitute as war risks. In cases where a cyber-attack can be characterised as either of these (or as another war risk), P&I cover would not respond.
Whether or not a computer virus constitutes an act of ‘terrorism’ for the purposes of the rules will largely depend on the motivation behind the act. In the context of war risks, terrorism has been broadly understood by English courts to mean an act or acts that aim to kill, maim or destroy indiscriminately for a public cause. For example, a computer virus released by an individual or group for the purposes of merely causing general disruption for the sake of it and for no public cause would be unlikely (without more) be classified as ‘terrorism’. Ultimately what for this purpose constitutes an act of terrorism is a matter for club boards to interpret according to their discretion, and their decision is final.
A hostile act by or against a belligerent power, is not defined in club rules and club boards are not afforded the same discretion in deciding what it means. However, such acts have generally been considered by English courts to arise in circumstances of ‘war’ and ‘civil war’. It is also generally understood that such acts have to be engaged in by a government or, at the very least, organised rebels who have the stated intention of overthrowing a government or depriving them of authority over part of their territory. A computer virus released by a government or organised rebels in a period of war or civil war could be subject to the exclusion of war risks under club cover. Otherwise P&I cover could respond.
Several members offer limited additional cover under the bio-chemical risks inclusion clause 2015 for crew injury, illness or death (including deviation, repatriation and substitute expenses and shipwreck unemployment indemnity) arising from the malicious use of computer software, code or viruses.
However, it should be noted that such losses are excluded if the ship or its cargo is used to inflict harm, or a computer, system or software programme is used to launch, guide or fire a weapon or missile.
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