Lloyd’s of London will offer an insurance limit equivalent to USD 1,275. The company will not cover cryptocurrencies “voluntarily” sent to erroneous accounts.
With the use of cryptocurrencies, the increasing number of investors, and the robberies committed by hackers, some companies are working on projects to protect the identity of their customers, the information shared by them, and the money they invest and save on wallets in form of crypto assets.
To protect the inversion of crypto users, the insurance giant Lloyd’s of London now provides a new type of insurance policy to recover cryptocurrencies in hot wallets that are lost after suffering a theft. In this way, the company could also protect the cryptocurrencies of its users that are stored in online or hot wallets against theft or hacking. Until the moment, it is known that the insurance limit will be only for about 1,000 pounds sterling, equivalent to USD 1,275.
Coincover, a firm that started operating in 2018, will be the firm in charge of offering this service. It is a platform that could manage more than 130 cryptocurrencies and that has insurance plans against theft of crypto assets. Lloyd’s syndicate Atrium worked along with Coincover in this new offer for their clients. Other Lloyd’s insurers will support the policy, including TMK and Markel, which are members of Lloyd’s Product Innovation Facility.
“It is a new type of insurance policy with a dynamic limit that increases or decreases in line with the price changes of crypto assets. This means that the insured will always be indemnified for the underlying value of their managed asset even if this fluctuates during the policy period”, the announcement explained.
Trevor Maynard, Head of Innovation at Lloyd’s of London, said that the British insurance company is the “natural home for insurance innovation due to the unique ability of unions to collaborate to secure new things”.
“As more money flows to the crypto asset market, the losses of hackers are increasing. However, cryptocurrency companies have found ways to protect their digital assets from theft”, Maynard added.
The Community Grows
According to David Janczewski, CEO of Coincover, a new wave of crypto-curious customers are ready to jump into the crypto world this 2020. This could happen since, as he said, the crypto-asset market heats up again at the beginning of the year.
He explained that the lack of adequate protection against theft and loss has discouraged some crypto-curious. “With this innovative new policy, we can remove these barriers and expand the appeal of crypto”, he commented.
This is not the first intend of Lloyd’s of London to protect cryptocurrencies stored in hot wallets. The digital asset trust company BitGo planned to provide crypto insurance through Lloyd’s.
The Gemini Exchange platform also launched an insurance company to cover up to USD 200 million for its institutional-grade crypto custody service, which is called Gemini Custody.
To sum up, Coincover added that the policy will not cover cryptocurrencies “voluntarily” sent to erroneous accounts so the firm would be very careful when analyzing the cases.
By María Rodríguez