Blockchain and cryptocurrency were originally created as an alternative to regular currencies and, as such, are not regulated partly for this reason. They have become more popular over the years, thus creating an entirely new industry.
The rise of blockchain technology has made millions of people become a part of this industry while also bringing new companies to the market. These companies mostly base their business operations on blockchain technology. Therefore both individuals and companies are in need of both personal crypto insurance as well as corporate crypto insurance for cryptocurrency to protect their cryptocurrencies and other digital assets.
Why Crypto Insurance Companies Are coming up
The traditional insurance industry is highly regulated, and has been working on the same principles for many years. Although insurtechs has brought some modernization to the industry to quite a certain extent. But a lot of these traditional insurance companies are still reluctant to take up crypto insure for cryptocurrencies and other digital assets.
Traditional insurers assess risk based on the historical data they have about the particular industry. When it comes to cryptocurrency, there is no historical data available. However, some insurers and brokers are prepared to take on the risk of insuring cryptocurrency companies.
We All Need Cryptocurrency Insurance?
The short answer is that every business needs insurance to protect its assets and financial interests. Protection from any unpredicted event that could jeopardize its future, and the same goes for crypto companies. Examples of blockchain and crypto insurance policies include:
- Personal crypto (HODLing)
- Crypto wallet
- Managing cryptocurrency assets
- Cryptocurrency exchange
- Crypto trading and investment
- Performing crypto custody (guarding third-party assets)
Do you belong to any of the above listed crypto categories or another blockchain-related field. You should strongly consider looking for the right crypto insurance coverages for your cryptocurrencies and digital assets. If you are considering getting cryptocurrency insurance for yourself or company. Here are some things you should know;
Why We Need Cryptocurrency Insurance
A lot of cryptocurrency owners, especially companies are startups, and as such, they have a lot on their mind when looking to grow their business. The crypto ecosystem is very fast-paced, and companies must keep up to survive. Focusing on finances, hiring, and developing business operations often takes business owners’ minds off risk management and insurance. And this can be quite dangerous.
Like every other investment or business, the cryptocurrency industry faces quite a number of risks daily. The volatile and unstable nature of the crypto market bring a considerable amount of risk. Given that we are talking about an industry that’s brought a lot of novelty. Cryptocurrency companies are still a bit of a mystery to the business world, including the insurance industry.
Although these companies have been around for a while now. Crypto insurance carriers are still reluctant to provide them with the necessary coverages because of their very unique risk exposure. It’s a fact that crypto exchanges can’t handle all the risk on their own. They also need to transfer some of it to an insurer who will provide a safety net for them.
Importance of Getting Crypto Insurance
Crypto insurance is very important for cryptocurrency industry as we need all the assurance and protection that we can get ensure our digital assets are well protected. Many regulatory factors are not making these things any easier. Another limiting factor is and neither is having to navigate through the volatile market.
Some crypto companies are in the exchange business, and some are lending companies. Their risks are closely tied to the fact that cryptocurrencies are volatile. They also have some additional exposure related to their specific industry.
Some of the Risks Cryptocurrency Owners Face
The nature of cryptocurrency indicates that most risks these companies face are mostly online. Cryptocurrency is, after all, a digital currency which does not have any physical form. Everything about cryptocurrency is online; ownership, trading, investments, and payments are all conducted online.
That is why the most prominent risk for individual crypto owners and crypto companies is mostly related to cyberattack. Criminals target crypto owners and crypto exchanges because cryptocurrencies and other digital assets can be extremely hard to trace once they get moved around. Even if a company has good internet security measures in place, the criminals are constantly looking for new ways to attack.
Their approach is also becoming more sophisticated. Social engineering is also a common way for hackers to access your network. They can also come selling a crypto investment opportunity that sounds too good to be true. They then trick into investing with them, as is the case with the increasingly popular Pig Butchering Crypto Scam and other crypto investment scams.
Which Crypto Insurance Policies Do Cryptocurrency Users Need?
To a certain extent, crypto owners, users, investors and businesses are just like all others, and their insurance needs are not so different. We’ll start with basic insurance coverages that all crypto owners and investors need to get.
Personal Crypto Insurance
Personal Crypto Insurance protects us from crypto scams such as crypto investment scam, crypto exchange collapse, and any other kind of personal crypto loss.
Crypto Wallet Insurance
Crypto wallet insurance helps protect against crypto wallet loss or theft, lost of password or private key or any other form of loss associated with our crypto wallets.
Crypto Insurance for business
Employment practices liability insurance (EPLI)Crypto insurance for business protects our crypto businesses and crypto companies. This is also used by crypto exchanges.
How Much Does Cryptocurrency Insurance Cost?
Crypto insurance for cryptocurrency and blockchain is still a new and emerging field. Like we already mentioned, traditional insurance companies are still reluctant to insure these businesses. That’s why crypto insurance companies like Cryptocurrencyinsurance.io are taking the lead to provide the best personal crypto insurance policy.
There are a few factors that influence how much you have to pay for cryptocurrency insurance:
- Number of assets covered by crypto insurance
- Type of assets covered by the crypto insurance product
- Level of risks – Is it high risk or low risk insurance cover?
- Syndicate atrium in conjunction with directors and officers
- Wallet holding the crypto – Is the cryptocurrency held in online wallet or custodial wallet?
How to Get the best crypto Insurance for Cryptocurrency
Efforts are being made to bring more regulatory clarity into the crypto industry. They include the Securities and Exchange Commission (SEC) or the Office of the Comptroller of the Currency (OCC). More and more banks and financial institutions are considering adopting cryptocurrencies as digital assets and investing in the industry.
All that would definitely positively influence the crypto insurance industry as well. Do you need more information about getting personal crypto insurance or cryptocurrency insurance for your cryptocurrency exchange or business? You can get started by reaching out to our experienced crypto insurance brokers. If you are ready to get your online quote, you can get started by registering here.