Cyber Liability Insurance for Fintech Companies is Complex

One of the first topics our new fintech clients want to discuss with our team of technology risk management experts is cyber liability.  They want to know how it interacts with professional liability, do they need both, or are neither relevant for their company.  Many times one of their clients or partners has requested the coverage and they don’t even know what it covers.  “Why do I need $10M of cyber liability and how much will that cost,” is a question we frequently get asked by early stage fintech companies.  Combine all of this with the rapidly changing nature of the fintech industry as a whole and that is why cyber liability insurance for fintech companies is incredibly complex.

To learn more about what fintech is, watch this video from CNBC.

What Type of Coverage do Fintech Companies Need?

Fintech companies need a combined technology errors and omissions, media liability, and cyber liability policy.  This will provide comprehensive protection as it relates to the technology and cyber risks facing the business.  In addition, there are companies providing financial advice or other services provided by licensed financial professionals.  In this case, there is a need for financial professional liability coverage to go along with the other coverages mentioned above.  These coverages are in addition to the basic general liability, property, workers’ comp, directors and officers, and other policies businesses need.

For more information on what cyber liability actually covers, read our blog post here.

What Else Should You Consider When Purchasing Cyber Liability Insurance for a Fintech Company?

You should not only consider the insurance coverage but also how you can reduce your overall technology risk by transferring risk to your critical vendors and subcontractors.  If you host your application at AWS, Azure, or on the Google Cloud, who is responsible for a revenue loss due to an outage?  Who takes the financial responsibility for a loss of your valuable data?  These are questions you should be able to answer.  If you can’t, you’ll want to assume you bear the financial responsibility for these technology failures.

For more information on properly transferring risk to your technology vendors, check out our blog post from a couple weeks ago.