When Cyber Insurance Lets You Down, 831(b) Offers A Plan B – NEW PODCAST

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You buy insurance for the ugly days. Then the ugly day arrives. Your claim meets an exclusion. Your “business interruption” clock runs out. Or a missed control turns into a denial. That gap is widening in cyber insurance as questionnaires grow longer and policies tighten. In the latest Cyber Insurance News & Information podcast, Executive Editor Martin Hinton interviews Dustin Carlson, president of SRA 831(b) Admin. Carlson argues that 831(b) structures can fund the losses left behind by cyber insurance gaps and denials.

831(b) In Plain English

Carlson explains 831(b) by borrowing a familiar tax-code cousin. He compares it to a “401K,” but for a business. A company can set aside “tax-deferred dollars” from gross revenue for a “rainy day.” The 831(b) is a “micro captive,” and Carlson compares it to an HSA mindset. You save for deductibles, exclusions, and surprise costs.

Cyber Insurance News podcast thumbnail on cyber insurance gaps and 831(b)/831B micro captive strategy; man in sunglasses outdoors with headline ‘Cyber Insurance Gaps: How an 831(b) plugs the hole’ and podcast logo.
Why Cyber Insurance Leaves People Exposed

Carlson says traditional insurers cap risk with exclusions and sub-limits. Cyber policies often carry both. 831(b), he says, can “fill in gaps of traditional coverage.” The episode highlights a tough truth: underwriters keep changing their questions as new types of losses appear.

These claim issues are real. Carlson warns that some companies depend on a cyber add-on to their general liability insurance, but those limits can run out quickly. He also points out the ‘human element’—employee mistakes can cause coverage to be denied.

Cybersecurity And Business Continuity Now Overlap

Beyond 831(b) and cyber insurance mechanics, Hinton and Carlson zoom out to the threat landscape. They focus on small businesses, not just headline targets. They explain why attackers pick firms with thinner defenses and fewer resources.

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They explain how cybercrime operates like a business and discuss social engineering tactics that use urgency, authority, and fear to trick people. They also discuss third-party outages that can disrupt business operations, as well as business email compromise and wire fraud. Even a single fake ‘updated banking instructions’ message can lead to expensive errors. You can use the chapters below to find the topics that interest you most.

Jump To The Chapters
  • 00:00 – 831(b) And The “Insurance Didn’t Pay” Problem
    Hear why Carlson positions 8319(b) as the backup layer.
  • 01:28 – A Rainy Day Fund For Modern Disruption
    He ties 831(b) to cyber breaches and business interruption.
  • 11:23 – Cyber Insurance Misconceptions That Hurt Claims
    The “cyber inside GL” myth. The procedure failures. The phishing reality.
  • 16:21 – Why Renewals Now Feel Like An Exam
    Expect more AI questions and more exclusions.
  • 21:29 – Read The Policy Like You Mean It
    COVID revealed how “business interruption” language disappoints buyers.
  • 28:50 – The Safety Illusion And The Shame Factor
    Carlson discusses stigma following ransomware payments and the policy consequences.
  • 33:17 – Cybercrime Runs Like A Business
    Social engineering targets emotions, urgency, and authority cues.
  • 38:20 – Vendors Can Knock You Offline
    AWS outages and SaaS dependencies can cause real interruptions and losses.
  • 45:53 – Business Email Compromise And Wire Fraud
    “Updated banking instructions” can drain real money fast.
  • 54:38 – Reframe Cyber As Business Continuity
    Carlson calls 831B the corporate version of an emergency fund.
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If you think your cyber insurance covers everything, this episode challenges that idea. If you want to be more resilient, it gives you a clear framework to discuss with your broker, legal team, and tax advisors.

Podcast Transcript – Guest Dustin Carlson

This transcript has been checked for accuracy, but confirm the elements yourself against the recording.

Cyber Insurance News Podcast Season 3 Ep 1 Dustin Carlson 831bDownload

Martin Hinton

Martin Hinton is the Executive Editor and Publisher of Cyber Insurance News and Information. With over three decades of journalism experience across six continents, his work encompasses investigative reporting, documentaries, and coverage of cultural, political, and business news. To learn more about his career, click on his name to visit his LinkedIn page.

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