Insurers TMK and Markel have also backed the new liability policy
Lloyd’s syndicate Atrium has partnered with Welsh broker Coincover to launch a new liability product that protects cryptocurrency held in online wallets.
The policy, which offers flexible limits from £1,000 upwards, aims to protect individuals against losses arising from the theft of cryptocurrency or other malicious hacks on virtual wallets.
The new product is backed by a panel of Lloyd’s insurers, which are all members of the market’s Product Innovation Facility (PIF). This includes TMK and Markel, to name a few.
Prospect Insurance Brokers was also involved in the development of the policy.
Matthew Greaves, underwriter at Atrium, said: “There is a growing demand for insurance that can protect cryptocurrency as it becomes increasingly popular.
“It is a testament to Lloyd’s that the market has put together an innovative solution to mitigate these new risks and protect against theft – from physical as well as online vaults – thereby providing customers with piece of mind that their assets are safe.”
The liability insurance policy uses a dynamic limit that will increase or decrease in line with the price changes of crypto assets – this means that policyholders will always be indemnified for the underlying value of their asset, even if this fluctuates over the policy period.
David Janczewski, chief executive at Coincover, described the product as “a unique and timely solution”.
He continued: “As the crypto asset market heats up again at the start of 2020, a new wave of crypto-curious customers are standing by at the ready to jump in, having previously been put off by the lack of adequate protection against theft and loss.
“With this innovative new policy, we can remove these barriers and broaden the appeal of crypto. It represents another step forward in enabling cryptocurrency adoption.”
Trevor Maynard, head of innovation at Lloyd’s, added: “As more money flows into the crypto asset market, losses from hacks are on the rise.
“Nevertheless, cryptocurrency companies have found ways to protect their digital assets from theft and, by working closely with Lloyd’s underwriters, to insure losses that do slip through the net.”
This liability product marks the second new insurance product to be backed by PIF members.
Last September, PIF members supported the launch of a profit protection policy for hotels – this uses an event-based triggered.
Coincover has received significant support from the Development Bank of Wales, as well as Welsh angel investors.
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