Precision English for RWI: Aligning Counsel and Disclosures—How to Align Counsel on Cyber Rep Wording and Seller Disclosure Letter Language

Step 1: Establish the Alignment Framework

Purpose: The first and most important move in aligning buyer’s counsel, seller’s counsel, and RWI underwriters is to convert divergent, abstract risk concerns into a single, agreed procedural and substantive structure. Parties frequently talk past one another: buyers want broad coverage, sellers want narrow promises, and insurers want determinacy and evidentiary anchors. You resolve that tension by establishing a framework that makes clear where each actor’s expectations will be located and how those expectations will be evidenced and tested.

Begin by identifying the touchpoints where words will matter. These are the negotiating loci that must be reconciled: (a) the cyber representations and warranties that will sit in the sale purchase agreement (SPA/APA); (b) the seller disclosure letter and its exceptions schedules that will operationalize the rep’s limitations; (c) the underwriting call and insurer follow‑ups, which translate underwriting tolerances and evidence needs into underwriting conditions or exclusions; and (d) the bring‑down certificate language that locks the reps at closing. Documenting these touchpoints prevents the common failure mode in which each document is drafted in isolation and ends up in conflict at closing.

Next, set roles and incentives explicitly. Put in words what each party is trying to achieve and why certain drafting choices follow from those incentives. Buyer’s counsel generally seeks breadth: a rep that captures historic incidents and current exposures and that does not erect procedural roadblocks to claims. Seller’s counsel seeks predictability and finality: narrow definitions, materiality thresholds, and a disclosure architecture that limits post‑closing surprises. The insurer’s objective is determinacy and evidence: clear definitions, repeatable tests, and documents that show either the absence of certain events or the presence of remediation. By framing these as complementary rather than opposed goals, counsel can commit to a working rule: the cyber rep will be proven or limited by the seller disclosure letter and the diligence record, not by vague assurances. This is crucial for underwriting—insurers will not underwrite coverage based on fuzzy managerial assertions.

Adopt a shared term sheet of definitions at the outset. Short, agreed definitions reduce later fights over interpretive edge cases. The term sheet should include, at minimum: “Cybersecurity Program,” “Security Incident,” “Personal Data,” “Material Systems,” “Reasonable Security Measures,” “Compliance with Laws,” and “Sensitive Data.” Keep these definitions operational and anchored to objective benchmarks where possible (for example, reference NIST/ISO controls or definitional thresholds used in privacy laws for “Personal Data”). The team should also agree how qualifiers like “material” and “to Seller’s Knowledge” will operate, because inconsistent use of those qualifiers creates downstream misalignment when schedules are inserted.

Output: Produce an “Alignment Checklist.” This is a short, actionable document the team signs off on prior to drafting. It lists the agreed definitions, the baseline rep language to be used, the categories of carve‑outs the seller will accept, the foldering convention for the disclosure architecture, and the types of evidence the insurer will accept (audit reports, incident tables, regulator correspondence). The checklist becomes the north star during redlining: it reduces surprise and prevents last‑minute changes that insurers will distrust.

Step 2: Draft a Baseline Cyber Rep with Negotiation Levers

Purpose: The goal here is to create a baseline clause that is precise enough to be insurer‑friendly, but modular enough to be negotiated without rewriting its conceptual architecture. The clause should be drafted so that each negotiable element is a single, well‑understood lever—scope, standard, time, knowledge, materiality, third‑party coverage—so that counsel can trade and insurers can map each trade to underwriter concerns.

Start with a model baseline rep that addresses program existence, incident history, and legal compliance. The rep should state that the target maintains a written information security program designed in light of its business, data sensitivity, and industry standards to protect the confidentiality, integrity, and availability of Material Systems and Personal Data. Follow that with a temporal and knowledge‑qualified statement about Security Incidents during an agreed Lookback Period and a compliance statement about Applicable Privacy Laws. The drafting discipline here is to keep each promise compartmentalized: program‑level promise; incident history promise; legal compliance promise. That structure allows each compartment to be carved out or qualified without collapsing the whole representation.

Identify and set each negotiation lever in bracketed language so parties can clearly see the tradeoffs. The primary levers are:

• Scope: Define what counts as “Material Systems,” “Personal Data,” and “Sensitive Data,” and whether third‑party providers are included. Narrow definitions reduce seller risk; broad definitions increase buyer recovery potential. Tie these terms to the disclosure schedules so their practical meaning is visible.
• Standards: Choose between open standards language such as “reasonably designed” and specific frameworks like “in accordance with NIST CSF” or “ISO 27001.” Broad standards favor sellers; named standards give insurers clearer tests.
• Temporal: Set the Lookback Period (commonly 18–36 months) and explain why the chosen length is appropriate given the target’s size and incident history. A longer lookback reduces buyer exposure to undisclosed historical incidents but may be resisted by sellers for diluting closure certainty.
• Knowledge qualifier: Apply “to Seller’s Knowledge” to incident history statements but not to the existence of the cybersecurity program. Define “Knowledge” clearly—whose knowledge counts, and how is it established?—to avoid future evidentiary fights.
• Materiality: Insert a materiality threshold tied to notification triggers, such as “resulted in material unauthorized access to Personal Data or Material Systems requiring notification to any Governmental Authority or affected individuals under Applicable Privacy Laws.” This keeps the rep focused on events of practical consequence and filters de minimis incidents.
• Third‑party risk: Clarify whether known vendor incidents that impacted the target will be treated as exceptions or remain within the rep’s scope; map known vendor incidents to the disclosures schedule where they can be evidenced.

Output: Deliver a redline‑ready baseline clause with clear bracketed options for each lever. Importantly, map each bracket to the specific insurer questions they will ask on the underwriting call so that negotiations can be instrumented: “If you narrow the standard from NIST to ‘reasonable,’ the insurer will require SOC 2 or similar documentation.” This mapping avoids surprises and speeds underwriting sign‑off.

Step 3: Engineer the Seller Disclosure Letter to Mirror the Rep

Purpose: The seller disclosure letter is the instrument that operationalizes the agreed‑upon limitations in the rep. To gain insurer comfort and to give the buyer predictable post‑closing remedies, the disclosure letter must mirror the rep precisely—capitalization, definitions, and exception structure must track clause by clause.

Structure the disclosure letter into discrete, easily auditable sections. Begin with a definitions cross‑reference so that every capitalized term in the rep has a single source of meaning. This eliminates a common source of interpretive disputes where similar but not identical words are used across documents.

Create an Exceptions Schedule organized by clause limb. For the program rep, include “Security Program Exceptions” that list gaps, risk acceptances, remediation plans, and audit findings. For the incident rep, prepare a detailed Incident History table that lists date, attack vector, systems or data affected, why notification was or was not required, any regulator correspondence, remediation steps taken, costs, and recurrence risk. For compliance, list known investigations, DPIAs, fines, or open corrective actions. For third‑party providers, include a vendor register showing material vendors, relevant audit rights exercised, and any vendor incidents that affected the target. Each entry should point directly to evidence in the data room.

Include a concise Data Map excerpt in the disclosure letter: a high‑level inventory of Personal Data categories, where those data are stored, and the retention posture. This is not a full data flow diagram but a practical index that insurers can use to judge exposure and to identify which data classes might trigger notification obligations.

Link every schedule item to supporting diligence materials using a Diligence References section. Point reviewers to specific data room folders and filenames for SOC reports, incident response reports, regulator letters, and remediation plans. Insurers want to be able to trace any exception to primary evidence without having to ask for a new diligence exercise.

Adopt precise language patterns in the letter to maintain seller protections while preserving clarity. Phrases like “Except as set forth on Schedule [X], Target maintains…” or “Except as disclosed in Schedule [Y] (including items [Y‑1]–[Y‑4]), to Seller’s Knowledge since [date]…” provide predictable mechanics for how disclosures operate. Also include a narrowly framed judicial‑style non‑admission clause such as “Solely with respect to the period prior to [signing date], and without admission of liability, the following matters are disclosed for avoidance of doubt: …” This prevents the disclosure from being read as an admission while preserving its force as an exception.

Output: Produce a disclosure template that counsels co‑author, ensuring the rep and schedule are lockstep. This template should be granular enough that insurer diligence can map each schedule entry to evidence, and flexible enough that sellers can make truthful, precise disclosures without inadvertently expanding post‑closing liability.

Step 4: Lock Alignment with Insurer Inputs and Bring‑Down Language

Purpose: Even the best‑drafted rep and disclosure letter will fail to provide closing certainty if the insurer has not been looped into the decision‑making process. The final stage is to convert the alignment achieved between counsel into underwriting comfort and contractual certainty at closing.

Sequence the underwriting engagement. Share the baseline rep and the draft disclosure outline with the insurer 48–72 hours before the underwriting call. This gives underwriters time to form targeted questions. On the call, walk through the program posture, the incident table, any regulator touchpoints, vendor risk, and remediation timelines. The call should be disciplined: capture follow‑ups, assign owners, and set due dates for evidentiary items. Insurers will expect this level of project management because it demonstrates that the seller can produce the promised evidence and that remediation is tracked.

Negotiate follow‑up formulations that will appear in underwriting commitments. These often include commitments such as: “Insured will provide final schedules reflecting incident remediation status as of [date],” or “Insurer to review SOC 2 Type II period limited to controls relevant to access management, logging, and vulnerability management.” Specifying which controls or time periods will be reviewed focuses insurer effort and clarifies what evidence is decisive.

Align bring‑down certificate language to the schedules and insurer expectations. The bring‑down clause should state that the cyber representations are true and correct as of the Closing Date, except as updated on a named schedule delivered on a specific date. Include a narrow bridge for new events between signing and closing: require prompt notification of any Security Incident requiring regulatory notification that materially affects Personal Data or Material Systems. This preserves the seller’s limited obligation for new, material events while protecting the buyer for significant pre‑closing deterioration.

Output: Produce an agreed closing checklist that ties the rep wording, the schedules, insurer conditions precedent, and the bring‑down confirmations into a single instrument. That checklist should list evidence items the insurer needs to release its conditions, the final schedule delivery deadline, and the exact bring‑down language that will appear in the SPA and the certificate. When counsel, the seller, and the insurer each accept that checklist, you have achieved operational alignment: negotiated words, documentary evidence, and underwriting comfort all point to the same practical outcome.

Conclusion

Aligning counsel on cyber rep wording and seller disclosure letter language is a drafting and project‑management exercise as much as a legal one. The four steps—establishing an alignment framework, drafting a modular baseline rep, engineering a mirroring disclosure letter, and locking alignment with insurer inputs and bring‑down language—give teams concrete artifacts and processes that eliminate ambiguity. The result is usable precision: clauses that are negotiable but predictable, disclosure schedules that are auditable, and underwriting commitments that map to evidence. When you apply these steps, you replace post‑closing disputes with a clear record of what was disclosed and what was promised, which is the foundation of marketable RWI for cyber risk.