Types of Cryptocurrency Insurance
The insurance of cryptocurrency and Its importance have been discussed in the last post. Today, I shall share some types of crypto insurance.
Custodial Wallet Insurance:
Cryptocurrency exchanges and custodial wallet providers have some service of insurance coverage for the assets stored on their platforms. These policies are designed to protect users' funds held in custodial accounts. This insurance typically covers losses due to hacking.
Hot Wallet Insurance:
Hot wallets are online wallets connected to the internet. Insurance policies for hot wallets work on cybersecurity risks. These policies may also cover losses due to employee theft.
Cold Storage Insurance:
Cold storage means the wallets that are not connected to the internet. Some of the cold wallets are hardware wallets or paper wallets. Insurance for cold storage mainly covers physical theft or loss.
Exchange Insurance:
Crypto exchanges often purchase insurance to protect their own holdings and the holdings of their customers. In case of hacking or attack the fund will be lost. As the fund is not only of the exchange owners & liquidity providers rather it is of the users of the exchange sites so the risk is high in this context. There are such instances in the history of losing funds by different exchanges due to hacking. So the insurance policies are designed to cover losses resulting from hacking, fraud, and other operational risks.
DeFi Insurance:
With the rise of decentralized finance (DeFi), insurance products are specifically customized for DeFi protocols and platforms. The target of DeFi insurance is to protect users' funds in smart contracts and liquidity pools from vulnerabilities and exploits.
Some Cryptocurrency Insurance Providers are-
Lloyd's of London:
Lloyd's is one of the world's oldest and most renowned insurance marketplaces. It has insurance policies for institutional clients and cryptocurrency businesses.
Aon:
Aon is a global insurance brokerage and consulting firm that works with various insurers to offer customized coverage for cryptocurrency-related risks.
Marsh:
Marsh is another major insurance broker that collaborates with cryptocurrency custodians, exchanges, and businesses to provide risk management and insurance services.
Coinbase:
The crypto exchange Coinbase has taken steps to protect customer assets through insurance coverage.
BitGo:
BitGo, a cryptocurrency custodian and wallet provider has insurance policies that are designed to protect against theft and other risks.
~ Regards,
VEIGO (Community Mod)
You have shared a great of Insurance before
Today you have shared a new one. It is also helpful.
Great article, indeed cold storage of crypto assets is one way to insure our asset
This is a well detailed article on cryptocurrency insurance, thanks for sharing with us 😊👍