Safeguarding Insurance: Protecting Customer Funds for Canadian PSPs
Summary:
Safeguarding insurance is a specialized insurance policy that Canadian payment service providers (PSPs) can use to protect customer funds as required by new regulations. If a PSP holds client money (e.g. prepaid balances, stored funds), they must “safeguard” it by either keeping it in a trust account or having an insurance/guarantee covering those funds. Safeguarding insurance ensures that if the PSP becomes insolvent, customers can recover 100% of their money promptly, helping PSPs comply with the Retail Payment Activities Act while freeing up capital that would otherwise sit in trust. It’s an essential tool for fintech and payment companies to maintain trust, meet Bank of Canada requirements, and keep their businesses agile.
Safeguarding insurance is a specialized insurance policy that Canadian payment service providers (PSPs) can use to protect customer funds as required by new regulations. If a PSP holds client money (e.g. prepaid balances, stored funds), they must “safeguard” it by either keeping it in a trust account or having an insurance/guarantee covering those funds. Safeguarding insurance ensures that if the PSP becomes insolvent, customers can recover 100% of their money promptly, helping PSPs comply with the Retail Payment Activities Act while freeing up capital that would otherwise sit in trust. It’s an essential tool for fintech and payment companies to maintain trust, meet Bank of Canada requirements, and keep their businesses agile.
Key Takeaways:
- New Law Requirement: Under Canada’s Retail Payment Activities Act (RPAA), PSPs holding end-user funds must safeguard those funds – either via a segregated trust account or through insurance/guarantee coverage equal to the funds held.
- What Safeguarding Insurance Does: Safeguarding insurance is an insurance policy that covers 100% of your customers’ funds if your company fails financially. It helps ensure customers get their money back quickly in a worst-case scenario, meeting regulatory standards.
- Trust vs Insurance: A trust account ties up funds as reserves (with possible deposit insurance limits), whereas insurance provides a financial safety net without locking your capital. Many growing fintechs choose insurance to stay compliant and keep their capital free for operations.
- Underwriting is Thorough: Getting safeguarding insurance takes preparation – audited financial statements, compliance manuals, and more will be required. Start early (it can take 2–3 months of due diligence) and work with experienced brokers to streamline this process.
- ALIGNED Insurance offers a one-stop solution to help PSPs navigate these requirements. They use a proven Audit → Optimize → Execute approach to assess your needs, find the right trust vs insurance mix, secure top-rated insurer coverage, and keep you compliant over time.
What is Safeguarding Insurance?
Safeguarding Insurance is a specialized form of insurance for payment service providers (PSPs) that protects customer funds held by a PSP. In plain terms, it’s an insurance policy that will reimburse all of your end-users’ money if your company can’t repay those funds due to insolvency or other failures.
This concept arises from new Canadian regulations. The Retail Payment Activities Act (RPAA) and its regulations require PSPs in Canada who hold funds on behalf of end users to implement safeguards. Specifically, under section 20(1) of the RPAA, any PSP that holds end-user funds must safeguard them either by:
- Holding the funds in trust in a dedicated account (separated from the firm’s own money), or
- Holding the funds in a segregated account backed by an insurance policy or guarantee for an amount at least equal to the funds held.
If your business doesn’t actually hold customer funds (for example, if payments simply flow through you instantly, without you storing balances), then these safeguarding rules typically don’t apply. But if you do hold funds (e.g., prepaid balances, stored payments waiting to be withdrawn), you must take one of the above approaches to protect those funds by law.
Safeguarding insurance refers to the second approach – using an insurance policy (or similar guarantee instrument) to satisfy the requirement. In practice, this means purchasing a special insurance policy from an insurer that will step in to pay out your customers if needed. It’s essentially a safety net for client money, ensuring end users can recover their funds even if the PSP itself runs into trouble.
Why Do Canadian PSPs Need Safeguarding Insurance? (Compliance & Benefits)
The need for safeguarding insurance is driven first and foremost by compliance. Canada’s PSP supervision framework (the RPAA, overseen by the Bank of Canada) aims to make sure consumers’ money handled by non-bank fintechs is as safe as it would be with a bank. Two core objectives of safeguarding are to give end users reliable, quick access to their funds and to shield those funds from loss if the PSP becomes insolvent. In other words, even if a payment company fails, its customers shouldn’t lose their money.
By September 8, 2025, any PSP holding customer funds must be fully compliant with these safeguarding requirements. Non-compliance can lead to hefty penalties (up to $10 million for serious violations, under the Act). So, if you’re a PSP that holds funds, safeguarding isn’t optional – it’s a legal obligation.
Why choose insurance as your safeguarding method? For many modern fintech companies, safeguarding insurance offers advantages over simply parking cash in trust:
- Keeps Your Capital Free: Unlike a trust account (where huge sums might sit idle as reserves), an insurance policy means you don’t have to lock away your own funds entirely. You pay a premium to the insurer, but the rest of your working capital remains usable to grow your business. This can be crucial for startups and scale-ups who need cash for operations.
- Protects 100% of Funds: A qualifying safeguarding insurance policy is typically set equal to 100% of the funds you hold (with no deductible). That means in an insolvency event, it can cover the full amount owed to customers. By contrast, merely relying on deposit insurance in a trust account would cover only up to $100k per user (CDIC’s limit) if the bank failed – and deposit insurance doesn’t address your failure as a PSP. Insurance covers the insolvency of the PSP itself, closing that gap.
- Regulatory Peace of Mind: Having a Bank-of-Canada-compliant insurance policy can demonstrate to regulators (and investors/partners) that you have a robust safeguarding system. It signals you are pro-actively managing risk with third-party validation.
- Faster Recovery for Clients: In practice, a claim on a safeguarding insurance policy would be triggered by a PSP’s insolvency, leading to prompt payout into a trust for customers’ benefit. Customers wouldn’t be stuck in a lengthy bankruptcy process – they get their money faster under the protection of the policy.
- Flexibility & Scalability: If your business grows and you hold more client funds, an insurance approach can often scale by simply increasing coverage (and paying higher premium), whereas scaling a trust means tying up even more capital. Some PSPs use hybrid strategies (a base amount in trust + insurance for excess) to optimize cost and flexibility.
Real-world scenario: A Canadian fintech wallet holds $5 million of customer balances on an average day. Keeping $5M locked in a trust would constrain their cash flow. By opting for a safeguarding insurance policy of $5M, they remain compliant without freezing $5M of their own working capital. The insurer commits to cover any shortfall if the company fails – so customers are fully protected, and the fintech can reinvest its funds into growth.
Trust Account vs Insurance: How to Safeguard Funds (Comparison)
PSPs essentially have two choices (plus a combination) for safeguarding end-user funds: Trust accounts and Insurance/Guarantee. Each approach has its pros, cons, and ideal uses. Below is a comparison to clarify how they differ:
| Safeguarding Method | How It Works | Who It’s Best For | Cost & Capital Impact | Key Considerations |
|---|---|---|---|---|
| Trust Account (Seg | Client funds are placed in a separate trust account at a bank or credit union, labeled for those beneficiaries only. Funds are legally held in trust and must not be mixed with company funds. | Smaller PSPs or startups with low volumes (easier to manage fewer funds). Also any PSP wanting a simple, low-risk solution without dealing with insurance underwriting. | Minimal upfront cost aside from potential bank fees; however, you must set aside an equivalent amount of cash as the funds you hold (can’t use it for operations). Opportunity cost: locked capital. (If held at a CDIC member bank in trust, each client’s portion may have CDIC deposit protection up to $100k [cdic.ca].) | Must ensure the trust is properly documented (trust agreement, record of each end-user’s balance). Not ideal if fund balances are very large (ties up too much cash). Doesn’t directly protect if your bank fails beyond CDIC limits, but primarily focus is protecting against your insolvency (which a trust achieves by separation of assets). |
| Safeguarding Insurance (or Guarantee Bond) | The PSP keeps client funds in a normal segregated account, and purchases an insurance policy or guarantee equal to or above those funds. If the PSP becomes insolvent or can’t return the money, the insurer/guarantor pays out so customers are made whole. | Established fintechs and payment companies handling significant client funds. Ideal if locking away millions in trust would hurt your liquidity. Also good for those who want extra reassurance to offer partners & customers (a third-party guarantee of funds). |
You pay insurance premiums (pricing depends on amount of funds insured, your company’s financial health, etc.). There’s also typically a one-time due diligence cost (insurers often have a paid audit upfront). On the plus side, no large capital reserve is tied up – your money stays available for business needs. Insurance covers the full amount of client funds even if that exceeds deposit insurance limits
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Lengthier setup: requires extensive underwriting (1–2 months of review). Must maintain coverage (insurer may need regular reporting to adjust coverage if funds grow). Choose a reputable insurer; policy must comply with RPAA (e.g. 30-days notice of cancellation, coverage not cancelable without replacement, etc.). A guarantee (like a letter of credit or surety bond) works similarly.
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| Hybrid Approach (Trust | A combination: keep some portion of funds in a trust and insure the rest. For example, first $1M in a trust as baseline, anything above $1M covered by insurance. | PSPs looking to balance cost and capital. A medium-sized PSP might not want to insure the full amount (to save premium) but also not trust the entire amount (to free some capital). | Requires managing two safeguarding methods. Could lower premium costs (if insuring only a portion) and reduce locked capital (by not trusting everything). | Need careful coordination – must ensure the sum of trust + insurance always covers total funds. May be a bit complex to administer but offers flexibility (you can adjust trust vs insured portions as business needs change). Regulators do allow combining methods, so long as funds are fully safeguarded in total. |
As shown, trust accounts are simple and effective but can tie up your liquidity, whereas safeguarding insurance requires more effort to obtain but can be more efficient for growing businesses. Some PSPs start with a trust when they’re small, then transition to insurance as they scale up – or use a hybrid model to get the best of both worlds.
How to Secure a Safeguarding Insurance Policy (Steps & Requirements)
Obtaining safeguarding insurance is a more involved process than buying standard business insurance. Insurers will do thorough due diligence on your company to ensure you’re a responsible candidate — after all, they are effectively guaranteeing all your clients’ money. Here’s how to prepare and what to expect:
1. Plan Ahead & Start Early: Don’t wait until the last minute. This isn’t a policy you can quote and bind in a day; insurers often take several weeks or even a few months to review a safeguarding application. If you aim to have coverage in place by the compliance deadline (or a product launch), begin the process early.
2. Gather Required Documents: Insurance underwriters will request a package of information. Be ready to provide:
- Financial Statements: Your most recent audited financial statements for the PSP entity (and consolidated group accounts, if part of a larger group). Strong financials give insurers comfort about your stability.
- Company Overview: A corporate pitch or investor-style presentation summarizing your business model, services, and team. Also prepare a legal entity structure chart (so underwriters understand the group organization and which entity holds the funds).
- Compliance Manuals: Relevant sections of your internal compliance manuals – especially those on Anti-Money Laundering (AML), Know Your Customer (KYC), handling of Politically Exposed Persons (PEP), and specifically your safeguarding procedures for client funds. These demonstrate you follow robust protocols in line with regulatory expectations.
- External Audit Reports: If you’ve had a recent external compliance audit or other third-party review, include a summary or results. Insurers love to see an independent seal of approval on your processes.
- Use Case & Rationale: A short write-up explaining why you need safeguarding insurance. For example, “Our PSP holds $X in customer balances and we want to use insurance to meet RPAA requirements instead of tying up funds in trust.” This helps underwriters see the context and how their policy will be used.
- Projected Funds Volume: An estimate of the amount of end-user funds to be safeguarded at policy inception (day one). This is crucial since it essentially sets the coverage limit – your policy needs to at least match the maximum funds you expect to hold, so underwriters need a number (often plus some buffer).
(These are key underwriting items; having them ready upfront speeds things up!)
3. Expect a Due Diligence Review: Insurers providing safeguarding coverage typically commission a detailed audit/review of your company’s controls. Often a specialized third-party does this (and it might cost the applicant a fee). They’ll evaluate everything – from your financial health to your internal controls and risk management. An insurer might require, for instance, that you achieve a certain compliance score (e.g., 90%+) in this audit to bind the policy. While this may sound intense, it’s also beneficial: it’s like an external validation of your safeguarding framework which can strengthen your operations.
4. Ensure Other Essential Coverages Are in Place: It’s common that insurers will only offer a safeguarding policy if you also carry core operational insurance for your fintech. Make sure you have (or are getting) a professional liability (E&O) policy, a crime/fidelity bond (covers fraud or theft), cyber liability, and potentially Directors & Officers (D&O) insurance. These policies mitigate other risks and give the safeguarding insurer confidence that your overall risk profile is well-managed.
5. Work with a Knowledgeable Broker: Because safeguarding insurance is so specialized, an experienced broker (like ALIGNED) can be invaluable. They will package your submission professionally, help you address any gaps before presenting to underwriters, and leverage their market relationships to get competitive quotes. A broker can also negotiate policy terms (ensuring the contract meets RPAA conditions and your budget). Essentially, they’ll save you time and maximize your chances of approval.
6. Bind and Maintain the Policy: Once approved by the insurer, you’ll pay the premium, and the policy is put in place. Ensure you understand any ongoing duties – e.g., reporting increases in funds held so the coverage stays sufficient. You should align the policy renewal with your business cycle and be mindful of any cancellation notice requirements (the RPAA requires the insurer can’t cancel without sufficient warning or replacement). With a good broker’s support, these follow-ups are usually handled smoothly on your behalf.
ALIGNED’s “Audit, Optimize, Execute” – How We Help PSPs Comply
ALIGNED Insurance is more than just a brokerage; we act as an advisor and partner to guide you through safeguarding compliance from start to finish. Our proprietary Audit. Optimize. Execute. process ensures that nothing is left to chance:
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Audit: We start by auditing your needs and risks. This means understanding your business model, whether you qualify as a PSP holding funds, how much you typically hold, and where your current compliance processes stand. We’ll confirm if you indeed require safeguarding (and if you might qualify for any exemptions) and evaluate your current approach (are you already using a trust? do you have any existing coverage that could help?). This step identifies any gaps in compliance or insurance coverage. Think of it as a mini risk assessment – and yes, it’s part of our service when you engage ALIGNED.
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Optimize: Next, we optimize your safeguarding strategy. Using our expertise in Canadian fintech risk management, we help you determine the best way to meet RPAA requirements with minimal friction. For some clients, that means recommending an insurance solution because it frees up capital. For others, a combination of trust and insurance might be ideal (maybe trust a base amount and insure the rest). We also ensure you have all the other necessary policies (E&O, cyber, etc.) aligned, so nothing holds up your safeguarding insurance approval. Essentially, we craft a tailored solution that balances compliance, cost, and convenience for you. As an independent broker, we don’t push one product – we find what fits you best.
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Execute: Finally, we execute the plan. ALIGNED taps into our network of 70+ insurance companies to find the right underwriters willing to provide safeguarding coverage. We help you assemble all documentation (financials, manuals, etc.), polish it for underwriters, and submit for quotes. Our team negotiates on your behalf – aiming for favorable terms and pricing – and keeps you updated every step of the way. Once you’re happy with an option, we bind the coverage and ensure you have the paperwork to satisfy regulators (we’ll help you demonstrate proof of insurance for registration, etc.). Post-purchase, we stick around: we assist with any ongoing reporting or adjustments needed and support your renewals. In short, ALIGNED is there from initial compliance audit through to policy placement and beyond, making the whole journey as smooth as possible.
By leveraging ALIGNED’s one-stop shop capabilities, you also gain convenience. We handle not just safeguarding insurance but all your business insurance needs (from general business liability to employee benefits or even life insurance if needed). Having a single point-of-contact for insurance means less complexity and more clarity. Above all, our goal is to ensure you’re fully compliant, protected, and optimized so that you can focus on growing your payments business.
Canada: What PSPs Should Know (Local Regulations & Nuances)
Operating in Canada means your safeguarding obligations are consistent nation-wide – the RPAA is federal legislation, so whether you’re in Ontario, BC, Quebec or any other province, the same core rules apply. The Bank of Canada serves as the regulator for PSPs under this framework. Here are a few Canada-specific points to keep in mind:
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Effective Date & Timeline: The safeguarding requirements (under RPAA and the Retail Payment Activities Regulations) came into effect on September 8, 2025. By this date, PSPs holding user funds should have either a compliant trust arrangement or insurance/guarantee in place. Registration of PSPs with the Bank of Canada began earlier in 2025, and now the Bank is actively supervising compliance. If you’re late to the game, urgency is needed to catch up—regulators expect you to take action promptly.
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Provincial Nuances: While the requirement itself is federal, implementation can involve provincial elements. For instance, insurance is regulated provincially in Canada, which means any safeguarding insurance policy must be issued by insurers and through brokers licensed in your province. ALIGNED is licensed Canada-wide, so we ensure any solution meets all regional requirements. Additionally, if using trust accounts, you may need to consider provincial trust law and perhaps separate trust accounts in each province where funds are held (though typically one national trust account suffices if properly structured).
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Working with Canadian Institutions: To comply, you’ll likely interact with known institutions: for the trust method, using a Canadian bank or credit union (approved as a “safeguarding account provider” by the regulator) is key. For the insurance method, ensure the insurer is financially sound and ideally Canadian-domiciled or authorized here (the Bank of Canada doesn’t explicitly restrict foreign insurers, but you’ll want one recognized and reliable in our market).
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Combination Allowed: The Bank of Canada explicitly allows PSPs to use a combination of trust and insurance safeguarding if that suits them. There’s flexibility to tailor your approach – you just must meet the core objective that all end-user funds are protected.
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No Indirect Safeguarding: A note of caution: the Bank has signaled that “indirect” arrangements (one PSP relying on another PSP’s safeguarding) are not generally acceptable, except in special cases. So, if you currently hold your customers’ funds by piggybacking on a third-party’s account, you’ll likely need to shift to a direct trust or insurance approach.
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CDIC vs. Safeguarding Insurance: Some PSPs wonder how this relates to CDIC deposit insurance. In short: CDIC (Canada Deposit Insurance Corporation) protects deposits if a bank fails, up to $100k per depositor. It does not protect against your own PSP failure. If you hold funds in trust at a CDIC member bank, each beneficiary’s portion may be insured (with strict record-keeping requirements). But that’s only if the bank fails. Safeguarding insurance, on the other hand, covers the scenario of your PSP failing – which deposit insurance doesn’t cover. So, think of safeguarding insurance as complementing Canada’s deposit insurance system by plugging the gap for non-bank PSPs.
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Regulator Guidance: The Bank of Canada has published comprehensive guidance and expects PSPs to maintain a safeguarding framework internally (policies, senior officer oversight, annual reviews, etc.). Insurance is one part of compliance; you should also keep proper ledgers of customer funds and test your processes regularly. Canadian regulators are focusing on consumer protection, so demonstrating good governance around safeguarding (which is often reinforced by the insurance underwriting process itself) will serve you well.
(Need more clarity on Canadian safeguarding rules? Consult official Bank of Canada resources or speak with a compliance expert – ALIGNED can connect you with guidance while we address your insurance needs.)
Safeguarding Insurance Prep Checklist
Before you request a safeguarding insurance quote or finalize your compliance plan, use this checklist to ensure you have all the bases covered:
- ✅ Confirm Requirement: Verify that your business is subject to safeguarding rules (i.e., you hold end-user funds pending withdrawal or transfer). If uncertain, review RPAA guidance or ask a professional.
- ✅ Safeguarding Approach: Decide which safeguarding method(s) to pursue. Will you use a trust account, opt for a safeguarding insurance policy, or a hybrid of both? (Consider factors like fund volume, growth plans, capital availability.)
- ✅ Prepare Documentation: Gather key documents for insurance underwriting. (See “How to Secure a Policy” above). Specifically, get your recent financial statements, compliance manual excerpts (AML/KYC/PEP), organizational chart, use-case summary, and funds volume estimates ready to share.
- ✅ Underlying Coverages: Check that you have core insurance policies in place – such as Professional Liability (E&O), Crime/Fidelity Bond, Cyber Liability, and D&O. If not, plan to secure them, as they may be prerequisites for safeguarding insurance.
- ✅ Consult Experts: Engage a qualified insurance broker or advisor who knows the Canadian PSP landscape. They can help you navigate the process efficiently and liaise with insurers.
- ✅ Implementation Plan: If you choose trust accounts, start setting them up with your bank (ensuring proper trust designations). If you pursue insurance, allocate time for the due diligence and review period (anticipate ~8–12 weeks).
- ✅ Ongoing Compliance: Establish internal monitoring – e.g., track your daily client fund balance so you know if you ever need to adjust your safeguarding coverage. Schedule an annual review of your safeguarding framework (as required by the Bank of Canada) and a triennial independent review to stay on track.
Keep this checklist handy as you work through safeguarding your customers’ funds. It will help ensure no key step is missed, giving you confidence that both you and your insurer are aligned on protecting those funds.
FAQ – Safeguarding Insurance for PSPs (Canada)
Q1: What is Safeguarding Insurance for payment service providers?
A: Safeguarding insurance is a special insurance policy that protects end-user funds held by a PSP. If the PSP can’t return clients’ money (e.g. due to insolvency), the insurance pays out to reimburse customers, ensuring their funds are safe. It’s one of the two main methods (along with trust accounts) that Canadian PSPs can use to comply with fund safeguarding regulations.
A: Safeguarding insurance is a special insurance policy that protects end-user funds held by a PSP. If the PSP can’t return clients’ money (e.g. due to insolvency), the insurance pays out to reimburse customers, ensuring their funds are safe. It’s one of the two main methods (along with trust accounts) that Canadian PSPs can use to comply with fund safeguarding regulations.
Q2: Is safeguarding insurance mandatory for Canadian PSPs?
A: It’s mandatory for PSPs in Canada that hold customer funds to implement some form of safeguarding – either using a trust account or having sufficient insurance/guarantee coverage. So, if you hold client funds, you must either set up a trust or get insurance. Using insurance is optional but it’s one approved way to meet the requirement (and often more practical for larger fintechs). If you don’t hold any end-user funds, then safeguarding rules (and insurance) wouldn’t apply.
A: It’s mandatory for PSPs in Canada that hold customer funds to implement some form of safeguarding – either using a trust account or having sufficient insurance/guarantee coverage. So, if you hold client funds, you must either set up a trust or get insurance. Using insurance is optional but it’s one approved way to meet the requirement (and often more practical for larger fintechs). If you don’t hold any end-user funds, then safeguarding rules (and insurance) wouldn’t apply.
Q3: How is a trust account different from safeguarding insurance?
A: A trust account means physically segregating customers’ money in a special bank account under a trust arrangement – keeping it separate from company money. This ensures if your company fails, those funds are isolated and can be returned to clients (plus they might have limited CDIC deposit protection in the bank). Safeguarding insurance, on the other hand, doesn’t involve setting aside cash; instead, you buy an insurance policy that guarantees the funds. If you fail, the insurer compensates the customers. Trust = locked funds (no premiums), Insurance = free funds but pay premium and undergo underwriting. Many PSPs use insurance when holding larger amounts because it’s more capital-efficient.
A: A trust account means physically segregating customers’ money in a special bank account under a trust arrangement – keeping it separate from company money. This ensures if your company fails, those funds are isolated and can be returned to clients (plus they might have limited CDIC deposit protection in the bank). Safeguarding insurance, on the other hand, doesn’t involve setting aside cash; instead, you buy an insurance policy that guarantees the funds. If you fail, the insurer compensates the customers. Trust = locked funds (no premiums), Insurance = free funds but pay premium and undergo underwriting. Many PSPs use insurance when holding larger amounts because it’s more capital-efficient.
Q4: How much does safeguarding insurance cost?
A: The cost depends on several factors, primarily how much client money you need to cover. Premiums are often a percentage of the insured fund amount. Insurers will consider your company’s financial strength, controls, and risk profile as well – a well-managed PSP might get better rates. There’s also usually an initial due diligence fee for the underwriting audit. Every case is unique, but generally the premium cost is worthwhile compared to tying up an equivalent sum as idle capital in a trust (especially for multi-million dollar fund balances). A specialized broker can give you a ballpark figure once they know your specifics.
A: The cost depends on several factors, primarily how much client money you need to cover. Premiums are often a percentage of the insured fund amount. Insurers will consider your company’s financial strength, controls, and risk profile as well – a well-managed PSP might get better rates. There’s also usually an initial due diligence fee for the underwriting audit. Every case is unique, but generally the premium cost is worthwhile compared to tying up an equivalent sum as idle capital in a trust (especially for multi-million dollar fund balances). A specialized broker can give you a ballpark figure once they know your specifics.
Q5: How do we get safeguarding insurance in Canada?
A: Start by contacting a licensed commercial insurance broker experienced with safeguarding or fintech policies. They’ll guide you through preparing the needed documents and will approach insurers on your behalf. Expect a thorough application process (financial review, compliance audit, etc.). It might take a couple of months from initial application to final policy, so begin well ahead of when you need the coverage in force. Once in place, remember to review and renew the policy annually to ensure it always covers your current fund levels.
A: Start by contacting a licensed commercial insurance broker experienced with safeguarding or fintech policies. They’ll guide you through preparing the needed documents and will approach insurers on your behalf. Expect a thorough application process (financial review, compliance audit, etc.). It might take a couple of months from initial application to final policy, so begin well ahead of when you need the coverage in force. Once in place, remember to review and renew the policy annually to ensure it always covers your current fund levels.
Ready to Protect Your Client Funds? Get Compliant with ALIGNED Today!
Safeguarding your customers’ funds isn’t just about checking a compliance box – it’s about demonstrating trust and stability in your business. Whether you choose a trust account, a safeguarding insurance policy, or a mix of both, taking action now will secure your customers’ confidence and keep regulators happy.
ALIGNED Insurance is here to make this process simple and successful for you. As Canada’s one-stop insurance shop for businesses (we handle commercial, life, benefits – the works), we have dedicated expertise in fintech & PSP risks. Our team would be thrilled to assist you in implementing the right safeguarding solution. We’ll bring in our Audit→Optimize→Execute methodology to ensure you get the protection you need with minimal hassle.
What happens when you reach out?
When you click for a quote or consultation, one of our friendly, expert brokers will contact you to understand your needs. There’s no obligation and no hard sell. We’ll likely ask for some info (see below) to tailor our advice. Your privacy is paramount – any data you share is kept confidential and secure, used only to serve your insurance needs. Soon after, we’ll present you with clear options and next steps to get your safeguarding plan in place.
When you click for a quote or consultation, one of our friendly, expert brokers will contact you to understand your needs. There’s no obligation and no hard sell. We’ll likely ask for some info (see below) to tailor our advice. Your privacy is paramount – any data you share is kept confidential and secure, used only to serve your insurance needs. Soon after, we’ll present you with clear options and next steps to get your safeguarding plan in place.
Have this info handy for a faster quote:
- Latest audited financial statements (and group accounts if applicable)
- A brief overview of your company and corporate structure (org chart)
- Your compliance policies summary (AML, KYC, PEP, safeguarding procedures)
- Any external audit or compliance reports you’ve done
- Estimate of client fund balances you’ll need to insure (approx. peak or average amount)
Why ALIGNED? With ALIGNED, you get a trusted partner – not just a policy. We’ll help you navigate every step, so you’re confident and clear on how your clients’ funds are protected. Our support continues after you’re insured, too; we’ll assist with ongoing compliance, renewals, or any changes you need as your business evolves. And remember, we can coordinate all your insurance needs in one place, saving you time and ensuring no coverage gaps.
Ready to safeguard your customers’ funds and comply with confidence? Click here to request a quote or call us at 1-866-287-0448. Let’s get your PSP fully ALIGNED with the new regulations and set up for secure growth!
References & Resources:
Disclaimer: This article is for general informational purposes and is not legal or insurance advice. Coverage availability and conditions for safeguarding insurance may vary by province and insurer. Always consult a licensed insurance broker (and legal advisor if needed) to review your specific situation and requirements.