If you’re among the millions of people that have made the leap to digital currency and want to protect it, you can accomplish that with crypto insurance. The insurance protects you against a loss of your digital assets due to cybersecurity breaches and theft. Insurance for the digital funds is typically offered by cryptocurrency exchanges.
In general, cryptocurrency insurance won’t cover hardware damage or loss, or transfers of cryptocurrency to a third party. Neither will it provide protection for personal wallets or against failure or disruption of the blockchain technology upon which cryptocurrency is built.
Investors that own conventional securities, such as stocks and bonds, enjoy insurance backing through private insurance policies or the U.S. government. The same isn’t true for cryptocurrency investors.
However, an increasing number of traditional insurance providers are extending cryptocurrency insurance to merchants and businesses that accept the digital coinage. It’s offered in the form of stand-alone policies or incorporated into a standard business policy. The policies can include storage for crypto keys, key recovery, and disaster recovery.
There are several reasons why traditional insurance companies have been hesitant or completely unwilling to insure cryptocurrency. It’s not a federally regulated asset and there’s no physicality. Several very high-profile thefts accounting for millions in cryptocurrency scared insurance companies away from issuing policies. Billions in cryptocurrency have been stolen overall and an estimated 20 percent of the currency is lost or locked in wallets to which passwords have been forgotten.
It’s important for you to understand that your standard homeowner’s insurance won’t cover cryptocurrency losses. In some instances, insurance companies will provide coverage as a rider to a policy, while other insurers will require you to purchase an entirely separate policy. It’s important to shop around, compare costs, and only work with insurance brokers that are familiar with cryptocurrency, as you may experience a situation that’s not covered.
For more information about how The Sena Group can help you with any
of your insurance needs, please contact us at 561-391-4661.
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The Sena Group
6501 Congress Ave., Ste. 100
Boca Raton, FL 33487