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Five big changes coming to ISO Commercial Lines insurance programs

Many business professionals recognize the ability to change as one of the hallmarks of good leadership. Heck, Einstein even said it was a measure of intelligence (and we’re smart enough not to argue with him).

Embracing change is a major theme for ISO commercial lines programs in 2020 and beyond. During our Verisk Velocity session, we outlined several exciting and significant anticipated changes coming soon to our commercial lines insurance programs.

Business Is Changing

1. Cyber incident exclusion endorsements for commercial property

Today’s cyber exposures weren’t contemplated when ISO developed the coverage language reflected in its Commercial Property coverage forms over 30 years ago. We’re introducing two new endorsements explicitly addressing the exclusion of loss or damage by a cyber incident. These endorsements are scheduled to take effect in a majority of ISO jurisdictions on December 1, 2020.

Both endorsements introduce a definition of a cyber incident and generally excludes loss or damage to covered property caused by a cyber incident. One endorsement also allows for the scheduling of certain exceptions to the cyber incident exclusion and addresses the application of sub-limits in certain scenarios. Premium discount factors are provided for these endorsements to allow insurers to offer premium discount credits to their insureds.

2. Streamlining the cyber program

As cyber risks evolve, we’re helping insurers keep pace by updating our cyber insurance policy program. ISO’s cyber program is being restructured to include two base policy forms (down from five). One base policy form is designed for small-to-medium-sized enterprises with under $250 million in revenue, while the second is geared toward larger corporations and financial institutions with over $250 million in revenue. The language has been enhanced to better reflect evolving cyber risk exposures, and media liability is now available as an optional endorsement to either base policy form.

Our corresponding cyber loss costs and rating factors can now be used to help price limits up to $100 million, up from $50 million. Additionally, we’ve nearly doubled the size of our cyber ratemaking database through the acquisition of additional cyber incident data. Reflecting recent trends, particularly the increasing frequency of cyber losses, the newly filed loss costs will likely be increasing.

3. Preparing for the future of commercial auto risk

Thanks to the proliferation of advanced technologies and connectivity, today’s vehicles are more vulnerable to novel perils, like hacking. Verisk’s first-to-market ISO Auto Hacking Expense endorsement tackles the emerging risk of commercial auto hacking. The optional endorsement is designed to be attached to all three existing base commercial auto forms and is generally designed to cover certain expenses for private passenger types and light/medium trucks associated with diagnosing, restoring, and repairing a vehicle after a hack. ISO’s coverage form and associated rating rule provides for the cost of repairing a vehicle’s computer system, temporary transportation expenses, and even ransom payments, among other related costs. It’s tentatively slated to be filed in 2021. You can learn more about the endorsement here.

4. Major updates to General Liability

This is a big one. After taking a hard look at every aspect of the ISO General Liability program, including feedback from members of ISO Panels and an examination of frequently asked questions to better understand where people were seeking assistance, ISO’s General Liability program is getting one of the most significant updates since its inception. Some of the highlights include a robust modernization of the classifications, more explanatory information, streamlined rules, and updated loss costs. Learn more about the expected changes coming to the ISO General Liability program.

5. Businessowners policy update

The needs of small businesses are changing, and we’re making sure the ISO Businessowners program changes with it. The anticipated updates to our program are designed to better align its classifications with new risk exposures facing small businesses today, such as fitness centers, walk-in clinics, and light artisan manufacturing. Some highlights include loss costs for drone-related property and liability coverages, revisions to hired and non-owned auto loss costs, and revised payroll amounts for contractor classes to better align with recent wage statistics. You can learn more about the expected changes coming to the ISO Businessowners program.

William P. Mauro

William P. Mauro is vice president and head of coverage for commercial lines at Verisk. He can be reached at

Elliot Burn

Elliot Burn is vice president and head of ISO commercial lines actuarial and data products at Verisk. You can contact him at

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