Some people are into cryptocurrencies not as a trader or investor but as a provider of a crypto trading or management platform for third-party crypto owners. Their services may involve custodianship, management or lending crypto money, which are of course high risks. However, since there are insurance companies willing to back them up with a policy to protect their financial interest and assets, they take risks by venturing into such kinds of cryptocurrency businesses.
Crypto companies are into dealing with digital currency that are without real physical form. All business transactions transpire online by way of blockchain processes and technology. Start up crypto entrepreneurs therefore should at least, have an idea about the kinds of insurance policies available as coverage for a blockchain-based crypto business.
Examples of Cryptocurrency Insurance Policies
There aren’t many insurers who offer general insurance coverage for cryptocurrency businesses. Presumably because estimating the average insurance rates and premiums still poses challenges.
Liability Insurance Against Cyber Crimes – Like any online business platform that collects and stores confidential information, a cryptocurrency company can have protection against data breach perpetuated by cyber criminals. A Cyber Crime Liability Insurance Policy can help a business operator recover financial losses caused by a data breach incident.
Insurance Coverage for Commercial Theft and Fraud – Cases of commercial theft and fraud are blatant criminal acts performed by unscrupulous individuals to defraud a business through connivance and manipulations. Some insurance companies are willing to provide protection against such losses, albeit subject to certain conditions.
Errors and Omissions (E&O) Liability Insurance – This policy provides protection against losses incurred as a result of unintentional error or omissions committed by employees. Also known as professional liability or Professional Indemnity Insurance, the coverage aims to indemnify a business against losses sustained from malpractice or negligence lawsuits
Liability Coverage for Directors and Officers – This type of insurance policy protects the directors and officers of a cryptocurrency company for losses sustained arising from claims of mismanagement or negligence. Such lawsuits may be filed by customers, investors, vendors, employees or government agencies on grounds of being remiss of fiduciary duties, or for not complying with workplace policies. In some cases, claims may stem from lack of governance or misuse of company funds.
Comparing Crypto Insurance Policies with SR22 Insurance
Like cryptocurrency insurance, not all insurance providers offer SR22 insurance coverage. Here, the protection includes issuing a SR22 certification that a driver, whose license has been reinstated, has obtained a new car insurance policy. The insurer’s responsibility in this type of policy includes issuing certification that the driver covered by the policy is also financially responsible.
Unlike the SR-22 insurance policy that DMV requires to have a driving license reinstated, SR-22 Insurance Quotes need only to refer to DMV guidelines pertaining to violators of traffic laws while in motion. Cryptocurrency insurance rates are hard to pin down due to the fluctuation in the value of the items covered by a policy.