Independent insurance brokerage Lockton, has launched a new industry-leading custody insurance facility available exclusively to its digital asset clients.
Developed by Lockton’s Emerging Asset Protection (LEAP) team in collaboration with leading global custody insurers, the facility is supported by Lloyd’s syndicates, together with highly rated insurance companies.
The facility will be able to provide Lockton clients with market-leading policy wording and full access to London market capacity, which is estimated today to be in excess of $850 million for custody coverage.
Some of the key benefits of Lockton’s new facility for its clients include them having access to full market capacity for custody coverage, without the need for third-party surveys.
At the same time, the facility provides the ability to secure bespoke programs, which will incorporate various limits and cost structures, designed to work alongside an insured’s existing and future risk management planning as it onboards custody of digital assets.
Lastly, the facility will also provide a clear route to entry via a streamlined custody insurance underwriting process, which will be managed by Lockton’s experienced LEAP team members.
Traditionally available through the London market, custody insurance provides indemnity in relation to private keys stored in secure locations, including those that are part of a multiparty computation (MPC) solution or entirely offline.
Moreover, custody insurance also plays a major role in risk mitigation by adding an extra layer of protection beyond technical and physical security for companies that are involved in the care, custody and control of digital assets or those providing technology to support custody solutions.
Neil Daly, head of Lockton UK’s LEAP team, commented: “Custody insurance plays a vital role in protecting consumer assets stored by third-party custodians and is an essential tool in the successful operation of many digital asset companies. Historically, securing that coverage has been difficult, often requiring complicated underwriting processes and the involvement of third-party surveys.
“Our new custody insurance facility makes it easier for companies operating in the digital asset ecosystem to build robust custody insurance programs, enabling them to better protect valuable digital assets and effectively serve their customers.”
Sarah Downey, head of Lockton’s global LEAP team, added: “This facility represents a step forward in insurance coverage for businesses in the digital asset custody space. Our LEAP team’s deep partnerships with both insurers and clients and our continued investment in and focus on innovation in this space, further exemplifies Lockton’s long-term commitment to helping the digital asset ecosystem continue to grow.