Cryptocurrency insurance is coverage for stolen or lost cryptocurrency. This insurance is only offered to businesses involved in blockchain or virtual assets. Customers of these businesses are covered under certain circumstances, but it is unlikely that traditional insurance companies will offer policies to retail users who don't use the services of covered enterprises.
Emerging decentralized insurance applications might offer solutions, but like cryptocurrency and blockchains, they are unregulated and require trusting others with your money.
Understanding Cryptocurrency Insurance
Most providers offer policies to cryptocurrency exchanges or other businesses with capital invested in cryptocurrency-linked operations. Customers are only covered in the event they are affected by a failure of the company's hardware, software, or services. For instance, if the exchange you stored your private keys on is hacked, and you lose all your funds, you might be covered if the exchange has a policy for that type of occurrence.
If you use a wallet the exchange supportsâbut didn't create or maintainâto store your private keys, you may be out of luck. There isn't any policy that protects consumers who hold their private keys themselves (yet).
Is There an Insurance Company for Cryptourrency?
Crypto insurance is only available to cryptocurrency service providers (businesses). There are decentralized insurance apps, but these are unproven and unregulated.
Can You Insure Crypto Assets?
Some insurance companies offer crime coverage to businesses that provide limited coverage against the theft of cryptocurrency funds. However, the available insurance policies only reimburse stolen cryptocurrency funds in certain situations, which don't include your account or wallet being hacked.
Key Takeaways
Cryptocurrency's popularity has made it a favorite target for thieves, who have stolen billions of dollars worth.
Insurers are tiptoeing into the field to offer limited crypto insurance that covers some situations but not all.
To be fully covered, crypto investors may want to consider various insurance policies, which can be costly.
Some popular cryptocurrency exchanges offer insurance through various means, but only if theft or loss results from a system or application they maintain fails to keep keys secure.
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