top of page
Tech-Specific Covearges
Tech companies have heightened E&O and cyber risks due to their distribution and digital-first presence. Only a handful of carriers write this without major gaps in coverage.
Tech E&O
Clients
Fintech
Contract
w/ Client
Client' Clients
Contract
w/ Clients
Contract
w/ Bank
Bank
Insurance
Litigation
Vendors
Regulators
Client(s)
Shareholders
Fintechs face significant risk based on their operations. Because of this, your banking vendor will typically require Tech E&O insurance.
Fintechs take actions as an intermediary between a vendor and the actual fintech customer.
Customers are in privity of contract for services with the fintech. If the services do not perform to the agreed upon standard, you may face a significant E&O claim for damages to the client, and the client's clients.
Cyber
Fintech
Cloud
Data Storage
Hacker
Data Breach
Client
PII
Insurance
1st Prty
3rd Prty
Litigation
Clients
Litigation
Regulators
Customers
Shareholders
Vendors
Cyber risk is largely based on the amount of Personally Identifiable Information (PII) a company takes in.
There are two categories of PII: High risk (SSN, bank acct. #'s) and Low risk (email, phone) and this affects pricing of insurance.
While you may use a third party vendor (TPV) to retain and protect this PII, you need cyber insurance for several reasons:
1. Your tech firm is still responsible to clients if there is a data breach at the TPV.
2. The TPV will always limit their liability, and the limit is typically very low.
3. You will get named in litigation when there is a breach and defense costs are significant.
D&O
Side A DIC
Side A
Personal Asset Protection
Side B
Company Reimbursement
Side C
Company Coverage
Private company D&O covers both the individual Directors and Officers and the Company itself for the costs associated with litigation and certain settlements.
Side B
If a director is sued, the company typically must indemnify the Directors and Officers (DE Title 8 Section 145), When the company does so, it is reimbursed under Side B Coverage. excess of any retention.
Side A
When the company fails to indemnify the director or officer (insolvency or refusal) then Side A coverage pays the legal costs and certain settlements with $0 retention.
Side C
When the company is named in a lawsuit, Side C provides coverage.
Side A DIC
Provides extremely broad additional Side A and is specifically reserved for individual directors and officers.
EPL
- Wrongful Termination
- Discrimination
- Failure to Promote
- Sexual harassment
- Wage and Hour Claims
EPL Claims are extremely simple for employees to file, and difficult for companies to resolve. Wrongful termination claims, for example, can take years to litigate, and settle at around 3X yearly salary. Discrimination claims are typically in the six to seven figure range, and class actions will easily get into the millions of dollars.
Because of this, insurers typically place large retentions on their policies, especially in litigious locations such as California.
While the structure of EPL is relatively straightforward, the wording can be highly complex, especially where you have independent contractors, international employees, or alternative corporate structures.
Fintech
Heavily Regulated
Stringent Vendor Req.s
Expensive, complex litigation
E&O Risk
Fintech
Contract
Contract
Bank
Fintechs face significant risk based on their operations.
Generally, a fintech takes actions as an intermediary between a vendor and the actual fintech customer.
Customers are in privity of contract with the fintech, and if there if services do not perform as agreed, you a potentially significant E&O claim.
bottom of page