The global insurance industry is increasingly focusing on the risks associated with cryptocurrencies and digital assets, as evidenced by recent product launches.
Insurance broker Marsh has introduced a digital asset custody insurance product targeted at the asset servicing market. This new offering boasts a capacity of US$825 million, making it the largest of its kind according to Marsh. The product aims to provide coverage for companies holding digital assets offline in cold storage as well as those utilizing other custody services, including multiparty computation.
Jacqueline Quintal, global digital asset leader at Marsh Specialty, stated, “Marsh’s facility provides custodians with protection for the key operational risks they face in the management of digital assets. We look forward to supporting clients globally in aligning their risk financing and evolving commercial strategies as they concentrate on enhancing their operational resilience and market presence in this rapidly expanding sector.”
In another development, UK-based boutique insurer M2 Recovery has rolled out what it claims to be the world’s first cryptocurrency legal expenses insurance policy. This initiative comes in response to a significant rise in crypto-related fraud, with the number of fraudulent blockchain transactions more than doubling from 2022 to 2023. Victims of these scams often incur costs exceeding £250,000 when attempting to investigate and recover lost crypto assets.
M2 Recovery founder Neil Holloway remarked, “Our insurance policy is the first of its kind globally, offering policyholders legal expenses in the aftermath of crypto fraud. We can insure legal expenses related to crypto assets worth millions for investors, neobanks, and in-play betting companies. This includes digital assets invested through the metaverse, utility tokens such as Freeway Tokens, and crypto assets lost due to man-in-the-middle attacks. As investment scams proliferate, minimizing risk exposure on substantial crypto investments has never been more crucial.”