I built a custom checkout flow. I thought I handled the tokens correctly using Stripe Elements. But the client’s QSA (Qualified Security Assessor) failed them on PCI-DSS compliance because my code was logging raw credit card numbers to a debug text file. The client is facing fines and is barred from processing Visa payments until fixed. They are suing me for the fines and the emergency remediation.
Key Takeaways
- PCI Fines are “Assessments”: Most policies exclude “Fines and Penalties.” However, specifically endorsed Tech E&O policies can cover “PCI-DSS Assessments” (fines passed down from Visa/Mastercard).
- Negligence: Logging PAN (Primary Account Numbers) is a rookie mistake. It’s clear negligence.
- Contractual Guarantee: Did you promise “PCI Compliant Code”? If so, breach of contract.
- Remediation: Insurance will pay to fix the code (Rectification) to restore payment processing.
The “Why”: The Fines & Penalties Exclusion
The Trap: Standard E&O covers damages to the client. It excludes “Civil Fines.”
Since PCI fines technically come from the Card Brands (private entities) passed to the Merchant Bank, they are “Contractual Penalties.”
You need a Cyber / Tech E&O policy that explicitly lists “Payment Card Industry (PCI) Fines and Penalties” as a covered loss.
The Investigation: I Quoted 3 Major Carriers
1. Coalition
- My Analysis: They cover PCI fines and assessments. This is a core part of their “Cyber” offering. They know that a failed audit is a financial disaster.
2. Beazley
- My Analysis: Very strong here. Their “MediaTech” policy includes coverage for “PCI Fines.”
3. Hiscox (Standard)
- My Analysis: Their standard PL policy likely excludes the fines. They would defend the negligence suit but might refuse to pay the $50,000 Visa fine.
[IMAGE: Screenshot of a log file masking/redacting vs unmasking CC numbers]
Comparison Table: PCI Liability
| Carrier | Covers PCI Fines? | Remediation Costs? | Best For… |
| Coalition | Yes | Yes | E-commerce Devs |
| Beazley | Yes | Yes | Fintech |
| Hiscox | No (Defense only) | No | Simple Sites |
Step-by-Step Action Plan
- Purge the Logs: Securely delete the text files containing CC numbers.
- Patch the Code: Remove the console.log or file write command.
- Notify Carrier: Specifically ask about “PCI Fines and Penalties” coverage.
- Hire a QSA: Your insurance might pay for a consultant to help you pass the re-audit.
FAQ
I used Stripe. Why am I liable?
Because your code intercepted the data before sending it to Stripe (or logged it). Stripe is secure; your implementation was not.
Are fines insurable?
Government fines (GDPR) are often uninsurable by law. PCI fines are contractual penalties, so they are insurable.
Does this apply to small shops?
Yes. If they take cards, they must be PCI compliant.