Sublimits: What execs get wrong about cyber coverage

This is why it pays to work with a specialist broker. The cover you think you’ve signed up for might not be all it seems…:


  • Businesses can often find “trapdoors” in cyber and traditional insurance policies where coverage is withheld due to missed provisions that limit funds for specific risks, Scott Godes, partner at Barnes & Thornburg, told CIO Dive.
  • If a business buys a policy for losses related to business email compromise (BEC), it might find the binder letter, or the document a policyholder receives before the policy is enacted, includes coverage for social engineering fraud. “What a company might not recognize is that that provision will provide a significantly lower limit of coverage” for BEC, according to Godes.
  • In a binder letter, businesses will find the insurer’s list of endorsements stop short of full coverage where they think they have it, said Godes. Months later, when the policy goes into effect, businesses will find what they thought was a $5 million policy will only pay out a fraction, maybe $100,000, to social engineering fraud.

Original article here