Refund-protection vs purchase-cover products — the legal distinction

This is not insurance. We say that sentence many times across our product surfaces, our consumer contract, and now this post. The reason is that the legal distinction matters — it determines which regulator oversees the product, what disclosures are required, and what a consumer is actually buying.

What a regulated risk-pool product is

A regulated risk-pool product is sold by an entity that pools risk across many buyers, holds reserves regulated by state or federal authorities, and is licensed in the jurisdictions where it operates. Pricing is actuarial. The legal relationship between consumer, the regulated entity, and the underlying event is mediated by a long body of regulation.

What Claimful is

Claimful is a refund-protection product. The merchant pays a protection fee on behalf of a consumer who opts in at checkout. If a covered event happens, Claimful issues a refund through Stripe Refund API against the original payment. The consumer's counterparty is the merchant; Claimful provides the refund-protection layer between them.

Why the distinction matters at checkout

If we used the language of regulated risk-pool products, the legal requirements would be entirely different — reserve filings, licensing, the works. Refund-protection is a different product class with its own consumer-protection posture. We disclose what we are clearly and we operate the product accordingly.

The disclosure surface

Every consumer-facing surface where Claimful describes the product carries the disclosure phrase. The widget shows it. The portal shows it. The confirmation emails carry it. Comparison pages on our marketing site carry it. The limitation of liability and the liability cap, when discussed, are framed as the limitation-of-liability clause in the consumer contract — not as a one-line promise from Claimful.