Mobile phone insurer Policy Administration Services (PAS) had signed a two-year deal with BT Mobile to provide a new mobile phone insurance product.
PAS director Steve Nobes said the product, Xtracare, is designed to meet the needs of BT Mobile's family customers.
It costs £5 per month for primary account holders and £3 for secondary account holders and provides multi-person cover for theft, breakdown, accidental damage, liquid and water damage and unauthorised call abuse.
PAS, which is part of the Caudwell Group, is the UK's largest provider of phone insurance. It also provides and administers insurance for Phones 4u, another Caudwell company.
Under the terms of the deal, PAS is responsible for all aspects of product management for BT, ranging from customer acquisition to claims fulfilment.