"We have filed action as the company refused to pay the claim giving various excuses," a Sri Lanka Cricket official said.
The triangular one-day series involving the hosts, South Africa and India between August 14 and 29 was scrapped after the Proteas raised security concerns on the conflict-torn island.
The South African team left Sri Lanka after a claymore mine blamed on Tamil rebels blew up the car of Pakistan's Ambassador Bashir Ali Mohamund and killed four of his guards. The diplomat escaped unhurt.
The blast went off close to the South African team hotel and damaged 10 vehicles.
"The claim remains unsettled despite our action to cover terrorism in the insurance policy", said the official, asking not to be named.
Sri Lanka Cricket had obtained a Sports Cancellation and Abandonment Policy from the local Ceylinco Insurance Company.
The complaint, filed by Sri Lanka Cricket in the Colombo Commercial High Court, seeks to recover losses of 11.9 million dollars due to the can