Analysis of LMA5399
About LMA5399
Drafted by the Lloyd’s Market Association (LMA) and released in May 2020, LMA5399 is a communicable disease exclusion for Casualty (Liability) Treaty Reinsurance.
Clause 1: LMA5399 exclusion
At its broadest, Clause 1 of LMA5399 excludes loss and liability ‘in connection with’:
- a Communicable Disease; or
- the fear or threat, whether actual or perceived, of a Communicable Disease.
Because all that is required between the loss/liability and Communicable Disease is a ‘connection’, the Communicable Disease may not have to be a cause of loss for the exclusion to apply. This intended effect of the exclusion is demonstrated by the words ‘regardless of any other cause contributing concurrently or in any sequence’ in clause 1.
Clause 2: definition of ‘Communicable Disease’
In clause 2 of LMA5399, ‘Communicable Disease’ is defined as ‘any disease which can be transmitted… from any organism to another organism’. Requiring the disease to be transmissible between organisms does qualify the scope of the definition; food poisoning, for example, would not be excluded as a ‘Communicable Disease’ because it is transmitted by the ingestion of contaminated food or water, not by a pathogen that is transmitted between organisms.
Beyond this,
- sub-clause 2.1 inclusively identifies types of pathogens;
- sub-clause 2.2 inclusively identifies means of transmission; and,
- sub-clause 2.3 identifies possible effects of the disease or pathogen.
None of these sub-clauses, however, are essential to the operation of the endorsement.