BitGo, one of the top cryptocurrency custodial firms in the world, has announced that it will be expanding insurance cover to assets that go beyond its $100 million coverage limit.
As an announcement published earlier this week confirmed, the firm will now become the first asset custodian to allow its customers to make purchases above its standard policy. The move is coming after the firm obtained an ‘Excess Specie Insurance’ policy through the global insurance marketplace, and it will provide users looking to make even more substantial purchases with an additional layer of protection.
Greater Flexibility and Security for Investors
BitGo’s insurance policy was first launched in February 2019, with the policy covering up to $100 million for the cryptocurrencies in its custody. The cover was launched in partnership with Lloyd’s of London, a major insurance firm based out of the United Kingdom. The policy covers assets lost due to complications like misplaced wallet keys or theft.
However, the introduction of this additional policy means that BitGo customers will be able to insure assets that go beyond its coverage. The policy also features prepared premiums and adjustable limits that will allow customers to only pay for the insurance period in question.
The new coverage will be managed by Paragon Brokers and Woodruff Sawyer & Co., a specialty commercial insurance broker based out of San Francisco. It will attract holders with significant asset value, especially in a market where volatility and safety are two of the most important factors. It also positions BitGo as a possible leader in the crypto-insurance space – one that has been growing at an impressive pace.
Companies Meeting the Growing Demand for Insurance
As the market for cryptocurrencies begins to take shape for 2020, there are no indications that asset theft will be slowing down. Despite the progress made in combating the issue, crypto theft is still a prominent problem, and all indications point to a surge in this year.
Recently, auditing and financial services giant KPMG published a report which confirmed that there had been over $9.8 billion in crypto assets stolen in 2017, with the main culprits of this being insufficient security measures and poor code quality on the part of asset custodians.
Due to this, both retail and institutional investors have been skeptical about holding cryptocurrencies, thus presenting a proper market for insurance. BitGo is not the only firm looking to capitalize on the growth in demand for flexible and effective crypto insurance. Earlier this month, Lloyd’s of London itself announced that it would be providing a new form of liability insurance that will protect digital assets being kept in hot wallets.
As a press release to that effect announced, the new offering was developed by crypto will-focused service provider Coincover and Atrium, a syndicate of Lloyd’s. The policy’s limits start from just £1,000 (about $1,275).
The press release added, “It is a new type of liability insurance policy with a dynamic limit that increases or decreases in line with the price changes of crypto assets. This means that the insured will always be indemnified for the underlying value of their managed asset even if this fluctuates over the policy period.”
Lloyd’s itself also started to insure crypto custody back in august 2019, with the service bring provided through its subsidiary Kingdom Trust.