British retail and commercial bank Lloyd’s has launched an insurance policy providing coverage for cryptocurrency wallets held in online wallets against theft from hacks.
The insurance is underwritten by Lloyd’s insurance syndicate Atrium, The liability policy is said to be a new type of insurance with a dynamic limit that increases or decreases in line with the price changes of covered crypto assets, which means the insured will always be indemnified for the underlying value of the asset even if this fluctuates over the policy period.
The first of its kind liability policy offers flexible limits from as little as £1,000 (US$1,281), designed to protect against losses arising from the theft of cryptocurrency held in online, hot wallets.
The announcement marks Lloyd’s effort to move further into digital assets insurance after it began offering protection to qualified custodian Kingdom Trust in 2018.
“As more money flows into the crypto-asset market, losses from hacks are on the rise. Nevertheless, cryptocurrency companies have found ways to protect their digital assets from theft,” Trevor Maynard, head of innovation at Lloyd’s.
The policy is backed by a panel of Lloyd’s underwriters, including TMK and Markel, that are members of Lloyd’s Product Innovation Facility (PIF), an initiative aimed to speed up insurance product development for complex and non-standard risk policies.
“There is a growing demand for insurance that can protect cryptocurrency as it becomes increasingly popular. It is a testament to Lloyd’s that the market has put together an innovative solution to mitigate these new risks and protect against theft – from physical as well as online vaults – thereby providing customers with piece of mind that their assets are safe.”
– Matthew Greaves, underwriter, Atrium.
As the crypto markets rev up again to drive 2020, crypto customer may regain some confidence in the industry with the provision of such new policy. The policy can broaden the appeal of crypto to a larger crowd, representing another step forward in enabling cryptocurrency adoption.