Lloyd’s has launched a new business interruption policy which it says is the first off-the-shelf parametric IT downtime policy tailored towards SMEs.

The new Parametrix Insurance policy uses a trigger which automatically pays out if a customer’s critical IT services – such as cloud, e-commerce or payment systems – are disrupted, significantly reducing loss assessment and claim processing.

“Insurance products and services have to evolve to respond to the challenges of the COVID-19 pandemic and help our customers cover new or heightened risks that they may encounter now or in the future,” Lloyd’s Head of Innovation Trevor Maynard said.

The product is led by Tokio Marine Kiln and supported by other members of Lloyd’s Product Innovation Facility, including RenaissanceRe.

Yonatan Hatzor, co-founder and CEO of Parametrix Insurance, says critical technology downtime has become the fastest-growing risk for businesses and the existing claims process is complicated, expensive and time consuming.

Lloyd’s Product Innovation Facility and its new Lloyd’s Lab cohort are both looking at ways the industry can more effectively cover new or heightened risks.