When incidents happen, the fastest path back to normal rests on two things: how carefully everyone acted and what the records show. A little planning makes claims clearer, cheaper, and less contentious.
Two forms of negligence, in plain English
- Negligence = someone fell short of reasonable care.
Example: a deployment job fails and endpoint detection and response (EDR) does not install on roughly 10% of endpoints. There is no post-deploy coverage check, the remote monitoring and management (RMM) alert sits for 48 hours, and one of those unprotected machines becomes patient zero in a phishing-led compromise. - Gross negligence = reckless disregard of a known, significant risk.
Example: weeks of reports show EDR is off across a large slice of the fleet. The issue is neither remediated nor disclosed to decision makers, and the breach begins on one of the unprotected hosts.
Most service agreements limit recovery for negligence with a limitation of liability. Those limits often do not apply to gross negligence. Cyber policies also set conditions for reimbursement, such as prompt notice, consent before hiring outside vendors or paying ransoms, and use of approved panel firms.
Contracts and policies set the guardrails
Two sources frame outcomes:
- Your agreement with the provider defines scope, responsibilities, and often a limitation of liability.
- Your cyber policy defines per-claim limits, sublimits, coinsurance, notice and consent timing, and panel-vendor requirements.
Think of the agreement as the ceiling for disputes and the policy as the rulebook for reimbursement.
The paperwork that pays dividends
Keep simple, findable documents that tell a clear story:
- Scope and responsibilities. A Statement of Work that shows what the provider manages and what you manage.
- Risk acceptance. Short, signed notes for any controls you decline, such as multi-factor authentication (MFA), EDR, immutable backups, or payment call-backs.
- Coverage snapshot. One page with your per-claim limit, key sublimits, business interruption trigger and waiting period, coinsurance, panel rules, and notice and consent steps.
- Incident basics. An incident response (IR) plan with roles, contact numbers for the carrier, broker, counsel, and provider, plus an incident log with timestamps and decisions.
Three common moments where records decide outcomes
1) Wire fraud
Require dual approval and a documented call-back before changing bank details, then keep the call-back log. Many policies expect verification steps for social-engineering losses. Having the log supports coverage and prevents confusion about who did what.
2) Ransomware
Follow the IR plan, notify the carrier promptly, use panel firms or obtain consent, and preserve evidence before rebuilding. These steps align with policy conditions and keep the timeline clean for everyone who will review it later.
3) Cloud or vendor outage
Confirm whether contingent business interruption is included, what triggers it, and what proof may be needed from the vendor. If you choose not to use multi-region or other resilience options, note that decision and the reasoning. Expectations stay clear when hours matter.
Declining controls without creating surprises
Sometimes a control is postponed for budget, timing, or workflow reasons. Treat that as a decision worth documenting:
- Note what was declined, why, for how long, and any compensating control.
- Make sure the decision matches what appears on your insurance application or questionnaire.
- Revisit the decision at renewal or after material changes.
A short setup checklist
- Ask for a one-page risk register that lists protections in place, any declines, and impact.
- Keep the coverage snapshot with your IR plan so first calls and actions follow policy conditions.
- Tabletop the first 24 hours with your provider. Who calls the insurer. What proves a security event. Where the call-back logs live.
- Review at renewal. Update scope, risk acceptance, and the snapshot as your environment changes.
Bottom line
Clear scope, thoughtful risk decisions, policy-aware incident steps, and time-stamped records keep claims straightforward and outcomes predictable. On difficult days, that is what preserves options, controls costs, and keeps attention on recovery where it belongs.
