Insurance and reinsurance marketplace Lloyd’s of London has launched a new insurance policy designed to protect cryptocurrency held in online wallets against theft or other malicious hacks.
The policy was created by Lloyd’s syndicate Atrium in conjunction with Coincover to protect against losses arising from the theft of cryptocurrency held in online, hot wallets.
Notably, it includes a dynamic limit that increases or decreases in line with the price changes of crypto assets, meaning the insured will also be indemnified for the underlying value of their asset even if this fluctuates over the policy period.
The policy is backed by a panel of other Lloyd’s insurers, which includes TMK and Markel, all of whom are members of Lloyd’s Product Innovation Facility (PIF).
“There is a growing demand for insurance that can protect cryptocurrency as it becomes increasingly popular,” said Atrium Underwriter Matthew Greaves.
“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.”
David Janczewski, CEO at Coincover, also commented: “We are delighted to have worked with Atrium and the Lloyd’s PIF members to bring such a unique and timely solution to the crypto asset market.
“As the crypto asset market heats up again at the start of 2020, a new wave of crypto-curious customers are standing by at the ready to jump in, having previously been put off by the lack of adequate protection against theft and loss,” Janczewski continued.
“With this innovative new policy, we can remove these barriers and broaden the appeal of crypto. It represents another step forward in enabling cryptocurrency adoption.”
James Gadbury, Senior Broker, Prospect, the insurance broker that worked with Atrium and Coincover to create the policy, further stated: “We are delighted to have provided Coincover with this new insurance cover, which demonstrates the innovative and entrepreneurial spirit of Lloyd’s. We believe Prospect and the wider insurance market should support this rapidly developing sector as it moves into the mainstream.”
And finally, Trevor Maynard, Head of Innovation at Lloyd’s, added: “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 and, by working closely with Lloyd’s underwriters, to insure losses that do slip through the net.”
“Lloyd’s is the natural home for insurance innovation because of the unique ability of syndicates to collaborate to insure new things,” Maynard went on.
“I am delighted that our Product Innovation Facility – now with almost £150 million of capacity and 27 underwriters, is providing a fast route to increase insurance capacity for difficult and hard-to-insure risks.”