Announced Tuesday, this group of mostly European insurers (none of whom were named) will offer a crime insurance product to institutions using Metaco's SILO solution for so-called hot and cold (online and offline) wallets.
According to Aon, the policies cover losses on everything from natural disasters destroying the private keys kept offline in cold storage to third-party hacks of hot wallets connected to the internet. It did not disclose the dollar amount of coverage available.
Insurance is scarce for crypto held at custodians or exchanges, particularly with hot wallets. However, the insurance industry has gradually responded to demand starting with cover for cold storage, which is similar to storing bullion or cash in a vault.
That demand is indirectly driven by banks and other financial institutions interested in holding digital assets, said Jacqueline Quintal, financial institutions practice leader at Aon Risk Solutions.
“Anyone who is speaking with institutions on the custody side or even from a trading perspective often finds themselves in the middle of a vendor management process that those firms put everybody through, and with that comes insurance requirements,” she said.
Based in Lausanne, Switzerland, Metaco is part-owned by the telecom provider Swisscom; the national postal service, Swisspost; and banking technology vendor Avaloq. It focuses on providing custody tools to crypto-curious institutions. The Swiss subsidiary of Russian state-owned Gazprombank is a client.
SILO, the firm's hardware security module-based (HSM) platform, involves components from Estonia-based security mavens Guardtime.
But making insurance readily available to clients is an important step now.
“We wanted to provide a framework under which any of the custodians relying on SILO would be almost able to get an insurance cover out of the box, at least to have all of the green lights for the technology components of the insured," Treccani said.
Aon image via Shutterstock
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