CFC publishes fintech insurance guide for brokers

Specialist MGA CFC has today (26 October 2022) published a guide for brokers on fintech insurance.

The firm said the guide was designed to help brokers understand the “fast growing industry sector” and its needs for unique insurance cover.

The guide includes an overview of the key exposures for companies in the fintech space and provides claims examples to demonstrate how bespoke cover responds.

Neil Beaton, the financial institutions practice leader at CFC, said: “Technology is becoming an increasingly integral part of the global financial infrastructure – because of this, fintech businesses have a unique combination of exposures that don’t fit the typical financial institution.

“Like many emerging businesses at the intersection of technology and industry, fintech businesses aren’t likely to find all of their exposures covered in a single policy.”

Key exposures

CFC explained that there were various key exposures for fintech companies that brokers should understand to better serve these clients.

These included –

• Theft of funds – high volumes of payments, transactions and customer accounts alongside the growth and implementation of new technology leave fintech firms vulnerable to theft
• Cyber event – given the highly technologically integrated nature of their operations, fintech businesses are prime targets for cyber criminals
• Professional liability – while negligent advice and client service failures are common risks for all financial services companies, fintech firms often rely on third party contractors that create an extra liability risk

Beaton added: “As the fintech landscape continues to evolve, brokers play an important role in advising clients on these emerging risks and the potential gaps in standard insurance policies.

“Hopefully our guide will provide a valuable resource and help ensure [brokers] can source policies that are tailored to the unique needs of their fintech clients.”