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why-payment-processors-need-liability-insurance

Why Liability Coverage is so Important for Payment Processors

Payment processing companies can deal with hundreds, thousands, or even millions of financial transactions on a daily basis. And with those transactions comes a number of different types of risk.

If the company’s software goes down or malfunctions, it could cause lost sales. Or, if there is a security vulnerability, a hacker could create fraudulent transactions or steal customers’ sensitive information.

In any of these situations, it’s easy to see how the potential losses can add up quickly. What’s more difficult is knowing what the payment processor is liable for, and how to assess their risk when writing a liability coverage policy.

Some of the factors that go into assessing a payment processing company’s risk include looking at the number of transactions they handle on a daily basis, how large those transactions are, how many transactions involve foreign entities, and where those foreign entities are located.

It also includes an assessment of any potential security vulnerabilities with their software applications, the systems they rely on such as data centers, the contracts they have with their business clients, and any related hardware such as point of service terminals.

Assessing Risk for Payment Processors

The odds of payment processing software malfunctioning or a security vulnerability being exposed may be rather small, but when there is a claim, the liability can be substantial.

That’s why insurance brokers often rely on liability risk assessment experts like Admiral to help figure out the risks involved in taking on clients in the technology industry like payment processors - because trying determine how much liability coverage is needed, and how much risk is involved in providing that coverage is a complex task that requires deep technical knowledge of the software and security industry.

And, just as it takes someone with deep knowledge to properly assess the risk, it takes that same knowledge to understand whether a payment processor is at fault when a claim is made, or whether that fault lies with a hardware manufacturer, business owner or other related service.

Professional Liability Insurance for Technology Service Companies

Admiral Insurance Group is a leading provider of professional liability insurance for technology service companies and is known for its expertise in creating solutions for hard to place risks such as payment processing firms.

Admiral is committed to the wholesale market and conducts business exclusively with leading, contracted excess and surplus brokers across the country. If you aren't already working with an Admiral appointed wholesale broker, locate one today to get your customers the proper coverage.

If you are an Admiral appointed wholesale broker, contact your underwriter for more information. 


Products and services described above are provided through various surplus lines insurance company subsidiaries of W. R. Berkley Corporation and offered through licensed surplus lines brokers.  Not all products and services may be available in all jurisdictions, and the coverage provided by any insurer is subject to the actual terms and conditions of the policies issued.  Surplus lines insurance carriers do not generally participate in state guaranty funds and insureds are therefore not protected by such funds.


 


Ben Woodward

Written by Ben Woodward

Ben Woodward is the Vice President of Professional Liability for the northeast region of Admiral and has been with the firm for 8 years. He is responsible for a team of talented underwriters who specialize in architects & engineers, medical malpractice, technology, and insurance agent risks. Ben graduated from Rollins College in Winter Park, FL and earned his MBA in finance from The University of Tennessee. He has been in the insurance industry for 14 years and has over 10 years of experience in professional liability. Ben is on the board of the PLUS Mid-Atlantic Chapter, and frequently presents at industry events for the Construction Specifications Institute and ExecuSummit.



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