Insurance giant Lloyd's of London is backing a new policy protecting cryptocurrency held in online wallets against theft from hacks.
Provided by Coincover, a crypto "lifestyle" service provider, the insurance is underwritten by Lloyd's insurance syndicate Atrium, Coincover announced on Sunday. 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.
Offering coverage with limits starting from £1,000 (US$1,280), the policy is designed to protect investors and traders against losses arising from the theft of crypto held in online, or "hot," wallets.
Trevor Maynard, head of innovation at Lloyd’s, said in the announcement the U.K.-based insurance giant is the "natural home for insurance innovation because of the unique ability of syndicates to collaborate to insure new things."
“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," Maynard said.
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.
Founded in 2018, Coincover is offering the insurance policy for assets held in multi-signature wallets from its partner BitGo to cover against third-party hacks or the theft of private keys.
The firm told CoinDesk that in making a claim"the customer would inform, supply us with certain details such as what they felt happened (i.e. PC hacked, lost phone etc.) as well as fill out a police report." Coincover would then investigate the claim and "endeavor to pay out within 48 hours" if the claim is approved.
The policy would not cover crypto asses "willingly" sent to the wrong address, the firm added.
David Janczewski, CEO of Coincover, said that as the crypto markets heat up again at the start of 2020, crypto-curious customers may have been put off by the lack of adequate protections in the past.
“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," Janczewski said.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.