#76: Read The Fine Print: 3 Traps That Kill Cyber Insurance Claims

In this episode of Cash In The Cyber Sheets, we unpack three clauses that quietly decide whether your cyber insurance pays when it counts. No scare tactics, just the fine print you actually need to verify before a breach becomes a bill.

First, waivers of subrogation. Your vendors love them. Your contracts team signs them. Your insurer may not. We explain what a waiver of subrogation does, why it can block your carrier’s right to recover from at-fault third parties, and how that can boomerang into reduced coverage or conflict with your policy conditions. We also walk through the practical fix: coordinating language between your vendor agreements and your policy so a well-intended waiver does not accidentally undermine the very coverage you bought. Think alignment, not after-the-fact apologies.

Second, acts of terrorism and acts of war. Two phrases that look similar on paper but can be treated very differently in your policy. We break down how carriers distinguish terrorism from war, why some policies reference government determinations, and how that impacts cyber events that have geopolitical fingerprints. The point is not to debate headlines. The point is to understand what your form says, so you know when you are covered, when you are excluded, and when you should push for clarifying endorsements before renewal.

Third, definitions. This is where companies get surprised, and where one organization recently saw a claim denied. Definitions drive everything from what counts as an “occurrence” to what qualifies as a “security failure.” If your loss lives outside those defined terms, coverage can evaporate. We outline a simple reading plan: print the definitions section, highlight any term that appears in insuring agreements or exclusions, and compare those meanings to how your team uses the same words in incident response plans and contracts. If the policy says “computer system” but carves out certain hosted environments, you need to know that now, not mid-investigation.

If you have a renewal coming up or a vendor insisting on broad waivers, this episode is your quiet nudge to pause, read, and confirm. Your future self, accountant, and caffeine budget will thank you.