Smart-ID, Mobile-ID service provider struggling to find insurance

Estonian ID-card and card reader.
Estonian ID-card and card reader. Source: Siim Lõvi/ERR

Smart-ID, mobile-ID and ID-card electronic identification services provider SK ID Solutions has told the Ministry of Economic Affairs it is having problems obtaining a new professional liability insurance policy. The state requires the company to have one by law.

The firm has been in discussions with insurance companies since mid-2021 to find a new policy and has worked with international insurance broker AON.

But problems have arisen as companies in the market have changed their strategies for insuring IT and cybersecurity activities, head of SK ID Solutions Kalev Pihl wrote to the ministry.

"This area is currently unattractive to them due to high risks or does not meet their business objectives," Pihl stated.

Many international companies are not interested in offering insurance in the region and Estonian companies do not have experience with the type of policy the company needs, he said. 

"Thus, in our opinion, this is a market failure through which it may be impossible to provide vital services within the meaning of the Emergency Act," Pihl wrote.

He suggested the obligation to have compulsory liability insurance should be removed from the law and other measures to ensure liability be introduced. For example, the state could purchase insurance on behalf of the company if it is not possible to do so any other way, Pihl said.

The current plan was only obtained because the group's owner Telia Eesti is part of the Telia Company Group, he wrote.

ERR has contacted the ministry for comment.


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Editor: Helen Wright

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