Sub-limit

A sub-limit is a specific cover cap, lower than the policy's overall limit, that applies to a particular category of claims or covers. It allows the insurer to cover a risk while bounding its exposure on certain items deemed more volatile, harder to model or subject to accumulation. A sub-limit never increases the overall cover, it subdivides it, meaning that a sub-limited item can consume only a fraction of the total cap. In cyber insurance, sub-limits are a central management tool, for instance to cap cover for ransom payments, payment fraud or business interruption caused by a third-party provider. From the insured's standpoint, reading the sub-limits is essential, because a high overall limit can conceal much lower internal caps on the covers that genuinely matter in the event of a loss. This is a frequent source of misunderstanding between insurer and insured when the indemnity proves lower than the policy's headline limit.

A cyber policy displays an overall limit of 5 million euros but a sub-limit of 250,000 euros for payment fraud, so that an 800,000-euro diversion is indemnified only up to the sub-limit.

sous-limite, sous limite de garantie