LLOYD'S has launched a new insurance policy to protect cryptocurrency held in online wallets against theft or other malicious hacks.
The first of its kind liability policy, with flexible limits from as little as 1,000 pounds sterling, 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.
It is a new type of liability insurance policy with a dynamic limit that increases or decreases in line with the price changes of crypto assets. This means that the insured will always 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).
As part of Lloyd’s ambition to be the world’s most customer-centric digital insurance platform, the facility is an important step towards building a marketplace that offers better value for the changing and diverse needs of customers through highly-responsive, cutting-edge risk management products and services.
This is the second new insurance product to be backed by PIF members in recent months. The first – a profit protection policy for hotels with an innovative event-based trigger – was launched in September.
Trevor Maynard, head of Innovation at Lloyd’s, says: “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.”
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. The innovative new policy removes the barriers and broadens the appeal of crypto, and represents another step forward in enabling cryptocurrency adoption.