Fintech Insurance for Innovative Companies
OMEGAFINTECH is built to address the unique exposure that innovative fintech companies face — without the complexity that comes with legacy insurance categories.
Instead of trying to force companies into those categories, we’ve unified financial technology, cyber, AI, crime and management liability into a single policy.
This approach brings clear advantages for brokers: streamlined placement, simplified client communication, and reduced claim friction. It eliminates finger-pointing between insurers when a claim spans multiple risk areas.
Fintechs can then move forward with clarity and confidence, knowing there are no hidden coverage gaps that will reveal themselves when it’s too late.
Fintech Insurance Regulations Brokers and Clients Should Know
The regulatory environment for fintech companies adds another layer of complexity to insurance. Requirements like PSD2 (Payment Services Directive) in Europe mean Account Information Service Providers (AISPs) and Payment Initiation Service Providers (PISPs) are legally required to have professional indemnity insurance.
The EU AI Act also sets out new rules. Financial institutions can’t use biometric categorization or emotion recognition systems.
The fragmented regulatory landscape in the US complicates things further. Insurance isn’t mandated at a federal level but is required in some states. And requirements are impacted by the strict data protection laws in states such as California.
How OMEGAFINTECH Helps Clients Stay Compliant
OMEGAFINTECH is designed for businesses providing critical fintech services through the use of technology, including:
- Digital payment platforms.
- Banking as a Service (BaaS) tools.
- Lending platforms.
- Wealth tech platforms
- Personal finance and budgeting apps.
- Buy Now, Pay Later (BNPL) apps.
The solution provides coverage for the following:
- First party: Incident response, business interruption, data restoration, bricking, cyber extortion, and digital crime.
- Third party: Liability for management, financial services, financial technologies, AI, network security, and privacy.
- Regulatory: Inquiry costs, regulatory investigations, and coverage specifically to ensure compliance with PSD2.
Fintech Insurance Claims Examples: OMEGAFINTECH
1. AI-Induced Violation of Financial Regulation
‘GlobalEdge’ is an investment firm using AI for client portfolio management and automated trade execution. The company faces regulatory investigation after its system scraped and acted on leaked non-public data, violating insider trading laws.
Trades had been executed for retail clients without proper suitability checks. And risk profiles were altered dynamically without client consent — a breach of fiduciary and regulatory obligations.
Clients sue over unsuitable trades and discriminatory risk adjustments, while shareholders accuse the company of ‘AI washing.’
OMEGAFINTECH provides cover for defense, damages, and management liability, protecting the company and its directors and officers against overlapping legal, financial and reputational risks.
2. Privacy and Network Security Breach
‘PlatformTrading.com,’ a platform for buying and selling currencies (including crypto) is alerted that a large amount of customer data is for sale on the dark web.
OMEGAFINTECH provides an incident response team to investigate root causes, mitigate further losses, and in the months ahead, provides legal and regulatory advice and further practical support. Cover also restores compromised systems and lost data – and indemnifies lost profits caused by business interruption.
Customers then allege misdirected funds. OMEGAFINTECH’s crime coverage indemnifies funds before claims escalate.
As regulators intervene and shareholders threaten derivative action over undisclosed cyber risks, OMEGAFINTECH mitigates financial risk to the company and its directors.
Takeaway for Brokers and Insurance Professionals
Fragmented coverage may have worked when fintech businesses were smaller and less complex. Today, they are global operators supporting millions of transactions and holding vast volumes of sensitive data. The stakes are higher, and so are the risks.
Our solution is purpose-built for this environment. It brings together the full spectrum of fintech liability coverage (financial technology, cyber, AI, crime, and management liability) into one comprehensive policy.
