What is Digital Asset Insurance?
Digital asset insurance is coverage specifically designed to protect businesses against risks related to digital assets, such as cryptocurrencies, digital tokens, and other forms of digital value. Given the unique nature of digital assets and the potential risks associated with their storage, transfer, and use, digital asset insurance has emerged as a specialized area within the broader field of insurance, an area that Continuum specialises in.
What does Digital Asset Insurance cover?
Given the evolving nature of crypto and defi risks, digital asset insurance is not a single policy but different policies that can cover a broad range of exposures that are unique to the industry. For loss or theft to digital assets from storage of transfer we can provide Crime Insurance designed to cover online or warm/hot wallet exposures or Specie Insurance designed to cover offline or cold wallet exposures.
For technology companies including wallet providers we can provide E&O/Professional Liability Insurance to protect from failure of the provided solution and/or failure to deliver on your professional services.
For all companies we can provide Start Up Business Insurance, D&O Insurance and Cyber Insurance.
Why buy Digital Asset Insurance?
There are insurance solutions available that can cover some or all for the following depending on the specific risk and underwriting appetite.
Cybersecurity and Hacking
Digital assets are susceptible to cyberattacks, hacking, and theft. Digital asset insurance can provide coverage in case a platform, exchange, or wallet is compromised, resulting in the loss of digital assets.
Loss of Private Keys
Private keys are essential for accessing and managing digital assets. If a private key is lost or stolen, it can result in the loss of the associated assets. Digital asset insurance can cover losses resulting from the loss of private keys.
Exchange and Custodian Risks
Many individuals and businesses store their digital assets on cryptocurrency exchanges or with third-party custodians. Digital asset insurance can protect against losses that occur due to exchange hacks or the insolvency of custodians.
Regulatory and Legal Risks
The regulatory environment for digital assets is evolving and can pose legal risks to individuals and businesses. Insurance coverage can offer protection against legal expenses and penalties arising from regulatory actions.
Business Interruption
Businesses that rely on digital assets for their operations may experience disruptions due to cyberattacks or other incidents. Digital asset insurance can provide coverage for lost revenue and additional expenses incurred during such disruptions.
Multi-Signature Wallets
Multi-signature wallets are a security measure where multiple private keys are required to authorize transactions. Digital asset insurance can cover losses resulting from a failure of multi-signature security protocols.
Errors and Omissions
Digital asset service providers, such as exchanges and wallet providers, can make mistakes or experience technical glitches that result in financial losses for their clients. Insurance can cover such errors and omissions.
Fraudulent Activities
Some digital asset insurance policies may cover losses due to fraudulent activities, such as Ponzi schemes or scams, that result in the loss of digital assets.
Physical Damage and Loss
While digital assets are intangible, the devices used to store them (e.g., hardware wallets) can be damaged, lost, or stolen. Insurance can cover physical losses of devices that lead to the loss of access to digital assets.
Digital asset insurance is still a relatively new field and is evolving as the digital asset landscape changes. Due to the complexity of digital asset risks and the evolving regulatory environment, it’s important for businesses to carefully review insurance policies and ensure they understand the scope of coverage and any limitations. As the adoption of digital assets continues to grow, digital asset insurance is likely to become an increasingly important consideration for investors, traders, businesses, and service providers in the cryptocurrency and blockchain space.
At Continuum we have in depth experience of digital asset insurance and dedicated platform for digital asset, crypto and defi risks.
Why work with Continuum?
Our in-depth knowledge of both the industry and the appetite of insurers allows to advise clients on the appropriate solutions to help them protect their business and offer value to their clients. We take a client-centric approach, appreciating that insurance may be a future requirement rather than an immediate need and advise on the timing of policy inception as well as helping with payment schedules and budgeting requirements. Our aim is to advise and assist digital asset firms from seed to flower and become a long-partner with them through their journey to success.
Choose your industry to find the coverage that suits you
Web 3.0 & Emerging Technology
Crypto, Digital Assets & NFTs
Financial Institutions
EduTech and E-Learning
Fintech, Insurtech and DeFi
Tech Start Ups and Developers
Digital Health and MedTech
