2-6-2023 (NEW YORK) London-based insurer Arch Insurance International has granted authorization to cryptocurrency insurer Evertas to increase the coverage limit for a single policy to $420 million, marking the highest coverage in the industry. This development is a significant boost for the crypto sector, which has been marred by the collapse of major market players like FTX, and aims to alleviate concerns surrounding hacks and thefts that have plagued the industry. Currently, only a small fraction, estimated at 2-3%, of global crypto assets are insured, according to Evertas.
Evertas CEO J. Gdanski stated, “This is the single largest policy that can be approved from one insurance company,” highlighting that other reported figures like $500 million or $1 billion typically involve multiple underwriters. The $420 million coverage applies specifically to crime-related policies involving the theft of private keys held by custodians, such as Coinbase Exchange and Binance. This marks a significant increase from Evertas’ previous single policy limit of $5 million.
As a “coverholder” for Lloyd’s of London, Evertas specializes in writing insurance for custodians with private keys, leveraging its technical expertise in assessing and underwriting complex risks associated with the crypto industry. Evertas joined the Lloyd’s of London marketplace in February 2022, giving it the authority to write crypto insurance on behalf of Arch, a member of Lloyd’s syndicate.
In addition to the coverage for private keys, Arch has also authorized Evertas to provide insurance on crypto mining hardware with a coverage limit of up to $200 million, which is the largest single policy coverage in this area. This expanded coverage is particularly important for crypto miners, who operate large facilities with extensive equipment and require greater protection against risks such as fire, flood, and other natural causes.
The insurance industry’s confidence in the crypto sector is growing, as demonstrated by Arch’s decision to offer significant coverage limits. The latest data from blockchain analysis firm TRM Labs revealed that crypto losses from thefts and hacks amounted to $400 million in the first quarter of this year, following losses of approximately $3.7 billion in 2022. Evertas’ CEO emphasized that the insurance industry recognizes the potential business opportunities and increasing demand in this emerging space.
