Expert Q&A - Fintech insurance
What do fintechs need to know about insurance?
Fintechs are constantly finding new and complex ways to innovate. It is a space that has seen serious growth over the past 10 years.
We sat down with our in-house expert, Account Manager Jack Scott-Bowden, to answer the key questions about insurance and help you understand all you need to know if you're operating in the fintech space.
Whether you're just getting started, or finding your current insurance provider is struggling to keep up with your evolving needs, find out how we help businesses in this industry. Looking for more information? Get in touch with our expert team.
Why would a fintech business consider purchasing insurance?
Fintech companies often find themselves providing a more efficient service than traditional means. By operating in this gap in the market, these businesses are often opening themselves to unique exposures that a traditional financial institutions or technology insurance policy may miss. In order to cover these risks, a specialised fintech policy is usually what's required.
How has the insurance market changed for fintechs in the last few years?
Fintech insurance came into focus around 2018 when PSD2 came into effect. Prior to 2018, fintech businesses were typically covering themselves with two separate policies. They were covering their technology activities with a tech policy and their financial services through a financial institution policy.
More often than not fintechs were primarily focusing on their financial institutions insurance and perhaps under insuring the perils attributed to the provision of their technology services.
What is covered by fintech insurance?
Fintech insurance is made up of Professional Indemnity (PI), Directors' and Officers' (D&O), Crime and Cyber insurance.
Depending on a fintechs demands and needs, a fintech policy can be tailored to suit them. The top risks a fintech may face are arguably cyber crime, wrongful acts committed by directors and professional negligence which will usually all be covered by fintech insurance.
Read more about the types of insurance fintech businesses should consider.
What our expert says
Jack Scott-Bowden, Account Executive
A common misconception is that fintech insurance is expensive. A good broker should be able to appraise the insurance market on behalf of a fintech business and provide a solution that is competitive and in line with the business’ demands and needs.
When should Fintechs consider buying insurance?
Fintech insurance is not a legal requirement, but fintechs who work in certain sectors should still consider it one of their core business needs.
Whilst not a legal requirement, some clients may choose to make this insurance a contractual requirement or your industry regulator might say it’s essential.
If you are an early stage business, fintech insurance can be purchased for a relatively small premium.
The FCA also requires certain regulated firms to take out professional indemnity insurance. And all firms using Account Information Service and Payment Initiation Service permissions are required to take out PSD2 insurance.
What other covers are typically bought by fintechs?
Essential covers that a fintech should consider outside of fintech insurance include intellectual property insurance, employers' liability, public and products liability, property cover, business interruption and personal accident and travel cover.
Key individuals may also wish to consider key person insurance or other employee benefit packages for senior management.
How we work with fintechs at SuperscriptQ
A comprehensive fintech policy means gaps and duplications in coverage can be avoided. Choosing a specialist insurance product also ensures that in the event of a claim, the handling and payment process runs smoothly.
SuperscriptQ can arrange the full suite of business insurance designed for fintechs, making sure that your business is not unnecessarily exposed whilst providing a level of cover for regulatory investigation costs.
- We offer a free health check of your insurance cover and we can provide recommendations, free of charge. No obligations. No strings attached
- We are a Lloyd’s broker - our access to over 60 insurers across the UK, Europe, Asian, Bermudan and American markets means we’re confident that we can make the most of current market competition to get your business the right cover at the best price
- If you are interested in working with us, we offer an end-to-end digital service which will streamline and simplify your insurance renewal process
SuperscriptQ supports high growth tech businesses who increasingly require bespoke insurance to protect themselves and enable continued growth, get in touch or book a call.
See more from our expert
Jack has been providing tailored insurance solutions in the financial institutions and fintech sector for over 5 years.
As an Account Manager in SuperscriptQ team, Jack offers a wealth of experience in guiding fintechs through the complex and ever-evolving intersection between financial services and technology.
This content has been created for general information purposes and should not be taken as formal advice. Please always refer to your policy documents for full details around exclusions, terms and limits of your customised cover.