With the growth of fintech and digital currencies, many non-bank payment providers now offer online services to transfer money. Among them are Electronic Money Institutions, more commonly known as EMIs.
EMIs provide an alternative to a business bank account and are useful for smaller businesses and sole traders, who are often excluded from traditional business banking but can operate via e-money accounts. EMIs are authorised and regulated by the FCA and can issue e-money and provide associated payment services.
Innovation and protection
Every new business model involves risks that must be mitigated with appropriate insurance. At Elmore, we typically split EMI insurance into two main areas:
1. Specialist fintech insurance
2. Commercial office package insurance
Under these broad headings we provide a range of risk transfer policies. Let’s take a closer look at the types of insurance that EMIs should consider.
Breakdown of specialist fintech insurance
• Cyber Insurance
This covers the technology, legal, public relations and other costs involved in responding to a cyber event. It may involve direct financial loss from business interruption, extortion, data and payment card industry (PCI) fines and penalties and defence when a claim is brought against the company for cyber events
• Professional Indemnity Insurance (PII)
PII covers negligent or wrongful professional service claims that result in third parties suffering injury, damages or financial loss. Insurance will cover the costs and expenses in defending a professional claim against a company and any damages if the claim is successful.
• Directors and Officers (D&O) Liability
D&O cover protects directors and senior managers against claims for wrongful or negligent acts in the execution of their duties. Claims may be brought by disgruntled shareholders, employees, creditors, competitors, suppliers, customers or by a regulator.
• Theft/Crime Insurance
This offers protection against theft, fraud and other dishonest acts by employees or third parties that damage the business and its reputation.
Breakdown of commercial office package insurance
• Employer’s Liability Insurance
All businesses should have cover against the cost of compensation claims arising from any illness or injury sustained by an employee as a result of their work for the employer.
• Public & Products Liability Insurance
Services or products provided to the public may lead to claims if the service/product is deemed to be sub-standard, damaging, or misleading. Insurance will cover the cost of claims made by members of the public in connection with business activities.
• Property Insurance
This covers damage/loss to buildings, contents, portable equipment and other property as a result of fire, flood or theft.
Are you covered?
Elmore helps EMIs and other fintechs stay protected in the digital economy. If you would like a risk assessment of your business, we can conduct a review, highlight any gaps in your cover and then provide appropriate insurance. See the full range of our services and please get in touch if you would like more information about how we can help you.
Written by Tom Abbotts – Cyber, Technology and Fintech Team Leader of Elmore Insurance Brokers.
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