According to CoinDesk, Relm Insurance, a company regulated by the Bermuda Monetary Authority, has launched a suite of five cryptocurrency-related insurance products. The offerings include cyber and wallet custody cover, professional liability insurance for cryptocurrency trading, and coverage for losses related to staking assets on the Ethereum blockchain. The company, which also provides insurance to emerging industries such as cannabis and psychedelics, has developed these products to address a range of digital asset risks.
The suite includes cyber cover, crime coverage for holding cryptocurrency in hot wallets (connected to the internet), and coverage for investment managers of digital asset funds. More unique cover options include reimbursement for losses associated with staking Ethereum, where a participant's assets can be 'slashed' for being offline.
Historically, obtaining adequate insurance cover for cryptocurrency has been challenging, with focus primarily on commercial crime market and the specie market, which covers high-value items like gold bullion or art stored in specially designed vaults. However, the landscape appears to be changing. Insurance broker Marsh recently announced an $850 million insurance offering covering cold storage and other custody solutions such as Multi-Party Computation (MPC), where cryptographic keys are split into shards.
Over the past few years, Relm has provided insurance cover to exchanges, payment and remittance platforms, custodians, software developers, and foundations that anchor decentralized autonomous organizations (DAOs) for some of the largest decentralized finance (DeFi) protocols. The insurer's CEO, Joseph Ziolkowski, did not name any companies but stated that the new product suite applies to areas within cryptocurrency where there is a lack of cover available. The capacity limits depend on each company and situation. Ziolkowski noted that while there is a significant amount of capacity for basic exposures arising from digital asset operations, such as cold storage or specie cover, there are far fewer markets willing to risk their balance sheet for more complex exposures.