Written by Aiying
Lloyd’s of London, which has a history of more than 300 years, now provides digital asset protection insurance through the Ethereum public chain. These insurances can be paid directly on the chain with cryptocurrency, simplifying the heavy paperwork of intermediaries and improving efficiency. Evertas and smart contract insurance provider Nayms played a key role in this process.
Lloyd's of London is one of the most famous insurance markets in the world, founded in 1686. As a global insurance and reinsurance market, Lloyd's is not an insurance company, but a market consisting of multiple insurance companies and individual underwriters, these members are called "Names". Lloyd's provides a platform for underwriting various risks, including complex and high-risk areas such as shipping, aviation, natural disasters, etc.
Lloyd's is unique in its underwriting approach and operating model. Each underwriter (or "member") underwrites risk through a Lloyd's syndicate, which is managed by a managing agent. Lloyd's structure allows underwriters to spread risk across multiple members, thereby increasing underwriting capacity and stability.
Evertas, an insurance platform focused on the cryptocurrency sector, recently received Lloyd’s of London underwriter status, becoming the first Lloyd’s underwriter to provide insurance for digital wallet products. This status enables Evertas to write and manage policies in different regions and specific sectors, and to write policies on behalf of Arch Insurance, a Lloyd’s member company. Arch Insurance is also the sponsor of Evertas’ underwriter application.
Hank Watkins, president of Lloyd’s of Americas, said: “The approval of Evertas’ underwriter application is the result of collaboration between Arch Insurance and its new distribution partners to create an innovative approach designed to promote growth in an industry that has been hampered by a lack of risk transfer options.”
Evertas CEO J. Gdanski said their goal is to enable people using public blockchain infrastructure to seamlessly connect with traditional fiat institutions. Whether paying with USDC or local cryptocurrencies, or putting the policy entirely on the chain, blockchain can help coordinate work between brokers, insureds, and insurance companies.
Nayms is a digital marketplace that focuses on connecting brokers and underwriters to crypto capital investments. Its name comes from Lloyd's "Name", which refers to individuals and companies that underwrite risks at Lloyd's. Evertas also provides insurance for custodians, exchanges, and Bitcoin mining. Last year, Evertas acquired mining insurance expert Bitsure and provided policy limits of up to $200 million for each crypto mining farm.
Nick Selby, head of European underwriting at Evertas, said they introduced expertise in the crypto space into the underwriting process, gaining a deeper understanding of the risks being insured, which allowed them to clarify coverage and pay claims faster.
Specific products
According to Aiying, they currently offer six main insurance products, which are detailed as follows:
1. Mining Property Insurance
Protect mining hardware and facilities from physical damage. This type of insurance is designed specifically for Bitcoin mining farms and covers equipment damage and business interruption caused by natural disasters such as fire, flood, earthquake, etc. The policy limit can be up to $360 million.
2. Platform Failure Insurance
Provides protection against losses caused by technology errors, such as software or hardware failures. This type of insurance helps businesses deal with system crashes, server failures, and other technical problems, ensuring financial security in the event of a technology failure, with coverage of up to $10 million.
3. Theft/Loss Crime Insurance
Protect digital assets and cash from theft, loss or damage caused by external malicious acts and attacks. This type of insurance covers all types of digital asset storage methods, including cold storage, warm storage and hot storage, ensuring the safety of assets in the event of external attacks.
4. Internal theft/loss insurance
Provides protection against theft, loss or damage to digital and physical assets caused by internal employees and contractors. This type of insurance is designed to protect against insider threats and ensure that the company is compensated in the event of internal wrongdoing.
5. Directors and Officers Liability Insurance
Protects company leadership from third-party legal action, including directors and officers liability, company indemnification and corporate liability. This type of insurance ensures the financial security of directors and officers from legal action and compliance issues, with coverage of up to $10 million.
6. Digital property insurance
Protect digital assets such as NFTs from loss or theft and address pricing challenges. This type of insurance takes into account the uniqueness and rarity of each asset, ensuring that losses can be accurately assessed and compensated in the event of theft or loss.
