Organisations looking to minimize the risks associated with bitcoin can now obtain virtual currency insurance coverage courtesy of Great American Insurance Group.
The company's crime policies currently do not cover what it calls "virtual peer-to-peer mediums of exchange". As such, a new form of protective coverage has been made available through its Fidelity/Crime Division to both commercial and government policyholders.
Great American explained its decision, stating:
"Standard crime insurance policies, including Great American's crime policy, currently do not automatically provide coverage for virtual peer-to-peer mediums of exchange. Crime insurance coverage for bitcoins can now be granted by endorsement to an existing crime policy."
Great American says the coverage is now available in most US states.
Protection against theft
The Windsor, Connecticut-based company says it is the first in the insurance industry to commercially cover bitcoin.
The company has $50m in underwriting capacity, and is part of American Financial Group Inc., a publicly traded company on the New York Stock exchange that earns roughly $5bn in annual revenue.
Great American's extension of virtual currency coverage only applies to crime, and thus, has its limitations. According to the company's Fidelity/Crime Division, the coverage includes employee dishonesty, money and securities, forgery and computer fraud.
Lending to its relatively unregulated nature, there are a number of risks associated with dealing in BTC. Many companies, for example, are wary of bitcoin after the failure of Tokyo-based exchange Mt. Gox.
The ability for companies and governments to insure virtual currency-related activities against criminal loss is a positive one, though there is still regulatory and price risk.
With the advent of newer virtual currency security features from companies like BitGo and insurance coverage capabilities, this is a sign the industry continues to mature and move forward.
Great American logo via Expert Insurance Reviews