Gallagher rolls out insurance to safeguard Australian fintechs in crypto space

Gallagher has launched a specialised insurance product, Gallagher Crypto-Pro, designed to address risks faced by Australian fintech companies managing digital assets.

The policy includes Investment Management Insurance (IMI), providing coverage tailored to businesses involved in cryptocurrency and blockchain operations.

Regulatory shifts for digital asset businesses 

Proposed changes to cryptocurrency regulations in Australia will require companies in this sector to obtain an Australian Financial Services Licence (AFSL). These businesses must also comply with licensing conditions and demonstrate their ability to compensate retail clients for breaches under the Corporations Act 2001.

The evolving regulatory framework is expected to increase oversight, presenting new challenges for fintech firms and emphasising the importance of risk management strategies and suitable insurance solutions.

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Gallagher Crypto-Pro policy details 

The Crypto-Pro policy offers coverage for civil liability, crime, and directors’ and officers’ liability.

Key features include:

• coverage for civil liability linked to digital asset investments
• crime insurance for losses involving both hot and cold storage systems
• access to recovery specialists for asset recovery and forensic analysis
• full-limit mitigation cost coverage for responding to asset-related incidents

According to Gallagher, this product is one of the first in Australia designed to provide comprehensive coverage for businesses operating in the digital asset market.

Risk landscape for fintech companies 

Gallagher said that the rapid growth of fintech firms exposes them to a variety of operational and regulatory risks, including:

• compliance requirements: Companies must navigate anti-money laundering (AML) and know-your-customer (KYC) frameworks to meet regulatory obligations
• data security: Managing risks related to the collection and storage of sensitive customer data is crucial as privacy regulations tighten
• cross-border complexity: Operating in multiple jurisdictions often involves complying with varying regulatory standards
• consumer protections: Ensuring transparency and guarding against fraudulent practices is increasingly emphasised by regulators

Additional insurance needs for fintech firms 

Beyond Crypto-Pro, fintech companies may require other types of insurance coverage to address specific risks, such as:

• professional indemnity insurance to protect against claims of professional negligence or errors
• cyber liability insurance to cover losses arising from data breaches or cybersecurity incidents
• technology errors and omissions insurance to address financial losses tied to technology failures or service disruptions
• directors’ and officers’ liability insurance to protect executives from claims stemming from management decisions
• general liability insurance to provide coverage for injury or property damage linked to business operations

Navigating evolving regulatory and market conditions 

As regulatory demands increase, Gallagher advised Australian fintech companies to prioritise compliance and risk management.

For firms operating in the global cryptocurrency market, adapting to regulatory changes in multiple jurisdictions remains an ongoing challenge. Comprehensive insurance coverage and expert advice are critical to mitigating these risks while enabling growth and innovation in the digital asset space.