Cryptocurrency insurer Evertas has received approval from London-based Arch Insurance Internationala to increase its single policy limit to $420 million. This coverage is available to custodians and cryptocurrency exchanges.
Evertas noted that a paltry 2-3% of all digital currency assets are currently insured, making the sector risky and holding back mass adoption of cryptocurrencies. In May 2023, the industry suffered losses of more than $70 million due to cybercriminals and hacking attacks.
The extended insurance policy is designed to restore confidence in an industry that has been hit hard by numerous high-profile scandals in the past year.
"It is the most extensive insurance cover available in this area from a single insurer," Evertas said. "You may have seen amounts of half a billion or even a billion dollars advertised. In reality, such programmes require the approval of several underwriters at the same time."
This new insurance will protect against risks related to fraud, hacking, theft of private keys/codes needed to authorise transactions or verify ownership of cryptocurrency resources held by custodians or cryptocurrency exchanges.
A London-based insurance company has given Evertas the option to insure cryptocurrency mining equipment up to a maximum of $200 million, the largest policy of its kind. Property insurance policies are sold to miners to protect their equipment from any damage caused by natural disasters such as floods, fires, etc.
According to Evertas CEO Jay Gdansky, having such an expensive policy is essential because mining companies must have substantial premises with lots of equipment, and this type of insurance can provide them with strong protection.
In February last year, Evertas was admitted to Lloyd's of London, giving it the ability to create crypto-insurance agreements on behalf of Arch, one of Lloyd's syndicate members.
Lloyd's syndicate consists of various insurance organisations that collaborate to offer protection against significant risks.
Last December, Lloyd's of London and other insurers refused to provide insurance coverage for cryptocurrency companies associated with the then-bankrupt FTX exchange.