Insurance for Fintech Companies

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Overview

Financial Technology (Fintech) is an industry focused on the application of modern and evolving technology to traditional financial services. If your company process credit card transactions, enables crowdfunding or transferred funds to another bank account through a mobile banking app, you can be considered a Fintech company.

Or, maybe you’re even involved in blockchain and digital wallets, some of the most exciting Fintech advances in decades. Front-end or back-end, it doesn’t matter — Fintech’s goal is to move the entire industry forward.

What are we not talking about? Banks, investment vehicles like private equity or hedge funds, insurance companies, or securities broker-dealers. While some within these spaces exhibit every quality of a “Fintech” company, these are all considered “financial institutions” in the insurance world and, as such, present unique coverage concerns.

Why is Insurance for Fintech Companies Important?

Fintech companies are often required to protect themselves from other companies in their space. Competition is fierce in this industry, thanks to the combination of new entrants at the bottom and M&A-hungry behemoths at the top. This combo creates a risky environment regarding customer acquisition/retention, as well as the threat of unfair trade practice or IP litigation from competitors. Policies such as directors & officers, errors & omissions, and IP insurance, can address many of these concerns.

Since the main function of these companies is to provide a professional service, few policies are more crucial than professional liability (errors & omissions) insurance. If a customer or affiliate claims they lost money as a result of your mistake, a lawsuit can soon follow. We’re all human and errors happen — but in Fintech, those errors are costly and traceable. An E&O policy is a common-sense protective measure to help Fintech companies manage risk.

Data Breach

When sensitive information is data is copied, transmitted, viewed, stolen or used by an individual unauthorized to do so. The Equifax Breach in 2017 that leaked 145.5m customers accounts (including social security numbers) was due to a server security patch that was not implemented.

System Failures

By nature Fintech companies are heavily reliant on back end systems and third party services providers for their frameworks, servers and data services. Any outages, downtimes or failures can result in significant losses for customers and the company. In many cases litigation can follow as a result.

Regulatory Non-Compliance

43% of Fintech sector leaders think that regulations have the potential to slow the growth of the industry. Navigating the complexity of regulatory requirements is a major risk for any Fintech company. Often operations do not fit easily into preexisting regulatory regimes, especially if you want to scale internationally.

Intellectual Property Protection

The Fintech industry is fueled by software and technology, making intellectual property (IP) something to defend. Consider copyrights and trademarks as prime examples of how this industry protects its IP. Fintech companies must also think about contractual measures to ensure their innovation is protected.

Types of Fintech Companies that need insurance

  • Crowdfunding Platforms
  • Mobile Payment
  • Insuretech
  • Robo-Advisors
  • Regtech
  • Blockchain & Cryptocurrency
  • Stock Trading Apps
  • Budgeting Apps

Fintech Frequently Asked Questions

The cost of insurance for Fintech companies will depend on several things, including the company’s size and development stage. Other factors include:

  • Exposures: risks being insured
  • Company practices: views on safety, compliance, and risk management
  • Program structure: the amount of deductible and willingness for a company to assume more risk
  • Claims history: the type and amount of past claims against the company

How it works

Finding insurance coverage doesn’t have to be painful. We aim to make the purchasing experience as streamlined & intuitive as possible.

1
Get a quote

Use our custom built online portal to get quotes fast. We automate clerical tasks that plague the traditional insurance brokerages, giving us more time to be responsive and alert to your company’s needs.

1
Get a quote

Use our custom built online portal to get quotes fast. We automate clerical tasks that plague the traditional insurance brokerages, giving us more time to be responsive and alert to your company’s needs.

2
Pair with a specialist

No two organizations are the same. Our team of coverage experts partners with your team to engineer your risk management strategy, together. We take the time to understand the intricacies of your company to get you the best possible coverage.

2
Pair with a specialist

No two organizations are the same. Our team of coverage experts partners with your team to engineer your risk management strategy, together. We take the time to understand the intricacies of your company to get you the best possible coverage.

3
Stay one step ahead

To do better, you need to know better. With changing political, technological, legal and economic landscapes, staying ahead of the curve is critical.

Our in-house team is tapped into the latest developments of your industry, proactively ensuring you’re covered.

3
Stay one step ahead

To do better, you need to know better. With changing political, technological, legal and economic landscapes, staying ahead of the curve is critical.

Our in-house team is tapped into the latest developments of your industry, proactively ensuring you’re covered.

Wil Hamory, Vice President

Meet your specialist

Wil Hamory is a Vice President at Founder Shield. Wil’s aim is to match the pace of business of Founder Shield’s innovative clientele to provide tailored insurance solutions at scale. He has been involved in the mobility industry since its infancy and assisted many of Founder Shield’s On-Demand and FinTech clients meet legal requirements while positioning them to rapidly expand.

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