Claims tested. Resilience proven.

‘LendCo’ has a fractious relationship with one of its counterparties, which has accused it of breaching loan conditions by not posting enough collateral. LendCo brings a claim against MarginCall, alleging that its software is not performing to specification. NOVAFINTECH steps in, providing cover for legal costs to defend the claim, irrespective of the ultimate outcome.

While investigating the claim by LendCo, it emerges that there may have been a network security breach of MarginCall’s computer system two years ago. As this was discovered during the policy period, NOVAFINTECH provides cover for incident response costs to determine the scope and impact, and then remediate.

It turns out that LendCo has deeper troubles and is subject to a regulatory investigation. Although MarginCall is not itself a regulated financial institution, it is dragged into the investigation and must cooperate fully. NOVAFINTECH provides cover for MarginCall’s costs of responding.

The regulators are targeting one individual for an apparent error. NOVAFINTECH provides cover to ensure the individual is properly represented, giving them peace of mind, but in many circumstances also protecting the company’s interests.

The tool incorrectly flags a large number of legitimate users (especially minorities and women) as potential identity fraud risks, which results in the financial harm of end-customers. These customers bring claims against their banks as a result of the impact. In turn, VerifiSure is sued by the banks for its errors in the performance of its services, but also for the failures of its AI technology — primarily its discriminatory output and its subsequent violation of AI regulations. NOVAFINTECH responds to these liability claims, providing the company and its employees with legal costs to defend against the claim and any damages they may need to pay.

In a rush to release the tool to market, VerifiSure doesn’t undergo rigorous testing and ultimately contains a vulnerability that malicious actors exploit to obtain the PII of individuals whose information has been processed by VerifiSure’s platform in the past 30 days. NOVAFINTECH provides the immediate incident response services to understand, mitigate, and remediate the network security and privacy breach, to notify any required individuals and regulators, and provide any ongoing identity monitoring services. The damages and legal costs arising from the subsequent consumer class actions are also picked up by NOVAFINTECH.

The financial services regulators aggressively investigate the financial institutions that utilize VerifiSure’s services, and also subject VerifiSure to investigation. Inquiries are commenced against key individuals. NOVAFINTECH goes above and beyond a standard cyber and technology errors and omissions policy to cover the expenses required to robustly respond to the investigations.