Metro - File #: 2025-0345

• File #: 2025-0345
• Type: Program
• Status: Agenda Ready
• File created: 4/24/2025
• In control: Finance, Budget and Audit Committee
• On agenda: 7/17/2025
• Title: AUTHORIZE the Chief Executive Officer to negotiate and purchase a cybersecurity liability insurance policy with up to $50 million in limits at a not-to-exceed premium of $3.104 million for the 12-month period effective September 1, 2025, to September 1, 2026.
• Sponsors: Finance, Budget and Audit Committee
• Indexes: Artificial intelligence, Audit, Budget, Budgeting, Expo Line Operating Project (Project), Federal Transit Administration, General Overhead (Project), Insurance, Los Angeles Union Station, Metro Rail A Line, Metro Rail B Line, Metro Rail C Line, Metro Rail E Line, Operations and Maintenance, Operations Maintenance (Project), Operations Transportation (Project), Owned Property (Project), Policy, Program, Purchasing, Rail Operations - Blue Line (Project), Rail Operations - Green Line (Project), Rail Operations - Red Line (Project), Rail Operations Control Center, Rail Operations-Crenshaw Line (Project), Union Station Property Management (Project)

Meeting_Body
FINANCE, BUDGET, AND AUDIT COMMITTEE
JULY 17, 2025

Subject
SUBJECT: CYBERSECURITY LIABILITY INSURANCE PROGRAM

Action
ACTION: APPROVE RECOMMENDATION

Heading
RECOMMENDATION

Title
AUTHORIZE the Chief Executive Officer to negotiate and purchase a cybersecurity liability insurance policy with up to $50 million in limits at a not-to-exceed premium of $3.104 million for the 12-month period effective September 1, 2025, to September 1, 2026.

Issue
ISSUE

Metro's cybersecurity liability insurance policy will expire on September 1, 2025. Insurance underwriters will not commit to final pricing until three weeks before the current program expires. Consequently, we are requesting a not-to-exceed amount for this renewal pending final pricing. Metro purchases an insurance policy to cover cybersecurity liability exposures. Cybersecurity is the practice of being protected against criminal or unauthorized use of systems and electronic data. These exposures include, but are not limited to:

? Unavailability of IT systems and networks
? Physical asset damage and associated loss of use
? Loss or deletion of data
? Data corruption or loss of data integrity
? Data breach leading to compromise of third-party confidential/personal data
? Cyber espionage resulting in the release of confidential/sensitive information
? Extortion demands to cease a cyber-attack
? Direct financial loss due to theft
? Damage to reputation
? Bodily injury/property damage to third parties

Without this insurance, Metro is subject to unlimited liability for claims resulting from a cyber-attack or data breach event.

Background
BACKGROUND

For this current renewal, Marsh USA, LLC (Marsh), the insurance broker for Metro, was requested to market Metro's cybersecurity liability insurance program to qualified insurance carriers. Marsh, through its partnership with Howden, a London broker, has received quotes from the incumbent carrier, which has A.M. Best ratings indicative of accept...