NFT Insurance Guide
All About NFT Insurance
A lot of people are seeking answers to questions about NFT insurance. Search queries like these; “Can I insure NFT?” “Does NFT have insurance?” are increasing daily. Find out all you need to know about Non Fungible Token (NFT) Insurance; how do you insure your NFT?
A lot of questions are beginning to pop up about Non-Fungible Tokens (NFTs) insurance. And one of the most popular of these questions is that; “Can NFT be insured?” You guessed right! NFTs can be insured.
Thanks to the innovation approach of new generation crypto insurance companies such as, Cryptocurrencyinsurance.io. The insurance industry is developing new forms of coverage, specifically designed around the risks inherent in NFTs.
Cryptocurrency Insurance offers protection for your crypto assets, NFTs and other digital assets.
Facts And Questions
What are NFTs?
NFT stands for “Non-Fungible Token.” It is a blockchain technology-based
mechanism that allows individuals to monetize digital content. The value
in NFTs is that like physical assets, digital assets can be scarce and
in turn, traded purposefully.
A report released by Cryptocurrencyinsurance.io, confirmed that the NFT
marketplace traded over 10 billion dollars in the third quarter of 2021.
That is an astonishing 38,000% increase over the year. It is clear that
NFT is an emerging asset class for investors. The question now is; "what
is making a lot of people to choose the NFT market?"
NFTs Can Be Insured
To protect NFTs and other digital assets, the insurance industry is
developing new forms of coverage, specifically designed around the risks
inherent in NFTs.
"It's definitely the Wild West out there," said Michael Giusti, senior
writer at insurancequotes.com, an Austin, Texas, insurance marketplace.
"Just because someone sells an NFT doesn’t mean they necessarily owned
the underlying asset ... It would be like someone standing in front of
their neighbor’s house with a counterfeit deed. Just because someone
paid money for that deed doesn’t mean they now own the house."
Giusti wrote a report about insuring NFTs. Just like any other
cryptocurrencies, tokens can be insured under certain circumstances, for
certain losses. It is possible to insure NFTs across different risk
vectors. Cryptocurrencyinsurance.io is one of the few insurance
companies offering NFT insurance options.
NFT is a Growing Market Place
The main motivation for most people investing in NFT is the long-term
value potential of the NFT market. In an increasingly digital world, the
popularity and need for digital assets has increased significantly.
Another significant contributing factor is Facebook’s recent shift
towards the Metaverse. This is making the digital world get closer than
we ever imagined.
Another attraction for NFT investors is the chance to establish “social
capital.” This social capital refers to the physical capital equivalent
of owning an exclusive wristwatch or an exotic automobile. NFT projects
and digital assets have also created a community of individuals who use
the NFT marketplace to start a brand. Others flaunt their social capital
thereby linking themselves with the crypto community.
What Does NFT Insurance Offer?
NFTs take on a wide range of forms whether it be art, digital currency
or simply an asset. The challenge is valuing an NFT at a fair market
price. Under a typical insurance policy, a fine art piece can be valued
based on its purchase price. Conversely, with an NFT, the value
fluctuates rapidly, a point which has left many insurers hesitant to
insure digital assets.
Industry leaders are concerned with both first-party and third-party
exposures in the NFT marketplace. Although a potential solution for
third-party exposures is a well-structured cyber liability policy.
First-party exposures may present a greater challenge to insuring NFTs.
Tangible assets and collectibles are valued very differently.
The manner in which NFTs are stored may have a significant impact on how
they are underwritten. There is a shift within the art industry, where
digital artists can buy and sell their digital art. Sharon Henley is the
vice president of research and development, and offers insights into
benefits;
Benefits of NFT Insurance
As a digital asset, the coverage options available for NFTs used to be
limited. But thanks to Cryptocurrencyinsurance.io, NFTs is now covered
under a standard digital assets insurance options. This coverage is
designed to protect against all forms of danger on both hot and cold
storage. This policy also covers decentralized finance and digital
auction house such as fine arts/digital artwork would likely not provide
coverage.
Cryptocurrencyinsurance.io offers accurate valuation data. There are a
lot of different opportunities on the horizon. Traditional “insurers are
scrambling to figure out how to provide coverage for those selling,
buying, or trading the non-tangible assets.” Cryptocurrencyinsurance.io
also offers insurance coverage for NFTs can protect against fraud and
intellectual property claims.
Limitations of NFT Insurance
As a digital asset, the coverage options available for NFTs are limited.
For example, NFTs would not be covered under a standard homeowners or
renters insurance policy. This is because coverage is designed to
protect against perils causing physical damage, such as fire or
vandalism. First-party exposures under a personal lines policy such as
fine arts/digital artwork would likely not provide coverage.
This is due to the current lack of accurate valuation data. However,
there may solutions on the horizon. Traditional “insurers are scrambling
to figure out how to provide coverage for those selling, buying, or
trading the non-tangible assets.” In the future, the hope is that
insurance coverage for NFTs can protect against fraud and intellectual
property claims.
Get Best NFT Insurance for Your Digital Assets
NFTs were not covered by the standard traditional insurance policy. What
this simply means is that personal property policies covering valuables
like artwork do not cover intangible items. NFT insurance is complicated
further by pricing fluctuation. A lack of consensus about the value of
NFTs at any given time is also another factor, unlike the relatively
stable dollar bill.
A cyber insurance policy may provide coverage for digital asset
restoration. A blockchain is a decentralized system that does not reside
in any one place. Indeed, the whole purpose of a blockchain is that it
is not supposed to be owned by a single entity. And cyber insurance
policies and smart contracts may exclude cryptocurrencies from their
definitions of money and securities.
How Cryptocurrencyinsurance.io Can Help
Cryptocurrency Insurance provides comprehensive coverage for all your crypto assets and NFTs. In addition to helping you protect your other unique valuables personal collections, and everything that matters to you. Contact the Cryptocurrencyinsurance.io personal crypto and digital assets insurance team anytime, they are always available to help. Get the best crypto insurance policy with the best crypto insurance company today! Visit: www.cryptocurrencyinsurance.io
