FinTech is a sector that didn’t even technically exist in any substantial way at the turn of the century but today, in 2021 it’s a sector that’s not only worth billions but one that marks the future of the financial market as a whole.
Whether you’re a cryptocurrency trader, a digital bank, or a remittance company, however, there are bound to be underlying insurance products that are specifically tailored for the FinTech market. Here, we’ll be highlighting a few of the more popular cover options and underlining the basics that all startup FinTechs should be focusing on.
Getting the Policies right
In any situation, the best place to start is with the insurance policies themselves. As the vast majority of FinTech companies will be focusing on more than one thing, it’s important to go for policies with a technology insurance company that include various types of cover in one package. These types of insurance include the following:-
Cyber insurance – Tech might very well be your bread and butter and what forms the basis of your business but it can also be your downfall. No matter how well prepared you are, cyber attacks can and will happen, which is why cyber insurance is so vital for any online-focused business.
Indemnity insurance – When you’re working with money and specifically with other people’s money, you need professional indemnity insurance to cover legal expenses if a client loses funs or suffers in any way as a result of your work. You could also become embroiled in an IP dispute or accidentally breach industry regulations, in which case indemnity insurance would be invaluable.
Theft insurance – Fraud costs UK businesses around £130 billion every year and the risks are even further exaggerated for FinTech firms. Any embezzlement, fraud or stolen businesses assets will require theft insurance behind it if you want to be secure.
Liability insurance – Both public liability and employer liability are necessary to protect your business if an employee or a member of the public is injured or becomes ill as a result of working for you. With recent global developments involving the COVID-19 pandemic, this one has never been more crucial.
D&O insurance – Directors and officers insurance is vital for the heads of the company duo they don’t face personal legal action as a result of business goings-on.
Business content insurance – Even tech companies need physical equipment to operate. That could be a massive server farm or a few laptops hooked up to a cloud computing network, either way, you want that equipment covered!
Going forward in 2021, there is going to be a major demand for FinTech, with investments tripling since 2014. With a greater market share, however, comes greater visibility and that means legal protection should be of paramount concern. So don’t sleep on it!