23 Apr, 2023

What Is Crypto Insurance, And How To Insure It In 2024?

how to insure your crypto


This guide will show you how to insure your crypto, how it works, and why protecting your digital assets is important.

The insurance industry is typically stable and predictable. However, the crypto space is highly volatile and unpredictable, causing many insurers to avoid it.

However, investors and business owners can still find suitable insurance policies for their crypto-related businesses.

This can be done by researching the crypto insurance industry and finding a company with beneficial coverage options or using a commercial insurance broker who can find the best policy for their specific business needs.


Insurance is a financial system where organized financial institutions undertake and provide guaranteed compensation or reimbursement for specified unprecedented losses.

The insurance industry flourishes with more money than the corporate world because the system is regulated and predictable.

However, the increasing popularity of the crypto market has crypto investors demanding crypto wallet insurance. Meanwhile, there is still nothing regulated about blockchain technology.

What Is Cryptocurrency Insurance

Crypto insurance
Cryptocurrency insurance.

Insuring your Crypto is a type of insurance that provides coverage for the loss or damage of digital assets.

The coverage can include protection from theft, hacking, and other types of loss.

However, the volatile nature of the cryptocurrency market puts insurers off because insurance principles function and thrive on the historical data of an industry or a market, using the same principles for years.

The unregulated market of cryptocurrency

The unregulated nature of the crypto industry allows for high theft occurrences. This is why more crypto investors and companies are clamoring for insurance policies that can cover losses arising.

The Crypto market has experienced major security breaches, leading to multimillion-dollar theft of crypto funds from personal crypto wallets, investments, and businesses.

According to Reuters, some of the most prominent digital asset thefts include hackers who stole approximately $615 million from a blockchain platform connected to the Axie Infinity game. In addition, another $23.3 million was stolen from a crypto exchange platform called Ronin.

In 2021 alone, the security breach in the crypto asset market accounted for $14 billion incurred losses through illicit activities, much higher than the $7.8 billion in 2020.

The crypto market deserves insurance backing to insure losses and protect cryptocurrency from brute force attacks.

Check out our curated list of the best crypto insurance companies for 2024.

best in class
Full cover
  • Yes
Supported Crypto
  • 100+
Supported chains
  • 20+

More details

If you're looking for a trustworthy option to protect your digital assets against possible threats, insurAce.io might be your solution. This innovative insurance protocol offers a range of insurance products catering to DeFi users and all users. InsurAce.io prides itself on being a complementary player in the DeFi Insurance space, providing essential coverage against fraudulent activities and other potential threats to your crypto assets and investments.

  • Low cover premiums.

  • Cross-chain coverage.

  • Multi-chain accessibility.

  • No KYC is required.

  • Lacks an interactive interface.

up and coming
Full cover
  • Yes
Supported Crypto
  • 120+
Supported chains
  • 6+

More details

If you're worried about the risks of investing in cryptocurrencies, InSure DeFi offers an excellent insurance system for your crypto portfolio. They use several layers of protection to ensure any damages are taken care of quickly. This is especially helpful for anyone concerned about cyber-attacks or hacking incidents. It's a pretty affordable option for beginners and pros, but it might be expensive for those with bigger portfolios since fewer features are available.

  • Portfolio protection on digital assets.

  • Offers a decentralized approach.

  • 50-100% asset protection.

  • Offers 24/7 Support.

  • Has limited features and offerings.

  • Insufficient risk assessment for pricing premiums.

  • Expensive pricing for full coverage.

Why Do Crypto Companies and Businesses Require Insurance

Cryptocurrency Business Insurance
Cryptocurrency Business Insurance.

There are a few reasons why an individual or a company might want to consider insuring your crypto:

  1. Protection against device theft and hacking: Cryptocurrency assets are stored in digital wallets and are vulnerable to hacking and theft. Crypto insurance can provide limited coverage if assets are stolen or lost due to a hacking incident.
  2. Protection against loss due to human error: Insuring your crypto can also cover losses if digital assets are lost or damaged due to errors and omissions made by the policyholder, such as accidentally sending their crypto assets to the wrong address.
  3. Compliance with regulations: Some jurisdictions have regulations that require companies dealing with cryptocurrency to have insurance coverage. Insuring crypto can help companies comply with these regulations.
  4. Attracting institutional investors: Institutional investors may require crypto insurance coverage to invest in a crypto company, as they want to ensure that they can recover their digital assets in case of a loss.

It’s important to note that while cryptocurrency has existed for some time, crypto insurance is still a relatively new and developing field.

Additionally, the coverage and terms can vary significantly between insurance providers. Therefore, researching and finding an applicable insurance policy that provides a crypto shield for your wallets and brokerage accounts is essential.

What Businesses Need Cryptocurrency Insurance?

Generally, any business dealing with any asset requires an insurance-backed guarantee that covers losses and ensures digital and other assets.

Unfortunately, the cryptocurrency market is no different. Scammers all over three net spaces are looking for who to steal from, and other unforeseen events can also lead to devastating losses.

Suppose you are involved in cryptocurrency through any of the protocols below.

In that case, you most certainly need to start looking out for Insurance companies that can cover any loss incurred:

  1. Crypto trading platforms
  2. Crypto custody (third-party holders)
  3. Crypto wallets management
  4. Crypto payment and remittance platform

If your business falls into any of these categories, you might want to start searching for organized insurers, and before you embark on that journey, there are things you must know.

Why Does Your Crypto Business Need Insurance

The crypto market is fast-paced, requiring investors and users to update their services constantly. Unfortunately, this means that most of these businesses are focused on many other things and forget the crucial need for risk management.

Every business faces considerable risk, but the volatile and unorganized nature of the cryptocurrency market means the chances are on the high side.

Moreover, the digital assets industry is relatively new, and there’s still a lot of learning and understanding to figure it out.

Many insurers are reluctant to insure or cover cryptocurrency losses because of their peculiar nature of risks. However, as valid as that sounds, these companies cannot handle these risks independently and, therefore, need third-party insurance for cryptocurrency insurance to manage.

Insurance is not a want but a major need in decentralized finance because not only are they trying to keep up with unregulated changes that may occur, but the volatile nature of the industry means any breach can cause a chain reaction of losses across several blockchains.

All You Need to Know
All You Need to Know About Crypto Insurance.

Types of Cryptocurrency Insurance Policies for Businesses and Corporations

Many different types of crypto exchanges, businesses, and platforms constitute the crypto market and are responsible for crypto exchanges. Each of them requires a unique type of insurance policy to cover losses.

Insurers would require to know the kind of wallet you use for a crypto exchange, the availability of cold storage if you use third-party holders, and other questions to help design an insurance system made particularly for you and your business.

Here are some Crypto Policies for specific Crypto businesses:

Directors and Officers (D&O)

The D&O insurance policy protects you and your group against business or management claims. These allegations typically involve fiduciary duty breaches, corporate funds misuse, failure to comply with workplace regulations, and a lack of corporate governance.

This policy is subject to litigation from investors, vendors, clients, and employees. You must engage with a top-notch broker to ensure the D&O insurance covers you.

Crime Insurance for Crypto

Another crucial coverage policy that is vital for crypto assets and blockchain companies is commercial crime insurance coverage. It offers indemnity and covers losses from cryptocurrency theft. For example, a crime insurance policy would reimburse the digital assets you lost while they were stored in your “hot” online wallets.

Theft and fraud are common in the digital world, and the cryptocurrency industry is hot. However, your insurer will provide a safety net to help you stand if the theft happens.

Errors and Omissions

Every business model that deals with people relations needs the E&O insurance policy, also known as professional liability or professional indemnity insurance. This insurance policy helps to indemnify you from malpractice, negligence, or error claims.

Since most crypto companies rely heavily on technology and coding, an E&O policy protects you from any security breach from coding errors.

The Cyber Liability Insurance

This is possibly one of the most crucial types of policy to purchase because you will be handling users’ checking accounts’ passwords and other personal information. You must keep all confidential information safe.

If an unforeseen data breach results in hackers gaining access to your users’ data or stealing crypto assets from crypto accounts or online “hot” wallets, the cyber liability insurance policy helps cover the loss that resulted from that breach.

Does the US Government Provide Insurance for Cryptocurrency Investments?

The United States houses more than 50% of blockchain and crypto companies in the global market. This makes the US the most significant space for the crypto industry.

In addition, one research shows that about 46 million American adults, almost 22% of the population, have either invested, held, or used cryptocurrencies at some point.

Considering these numbers, it is perfectly logical for the federal government to cater to the insurance needs of their cryptocurrency investments. Yet, unfortunately, that is not the case, as there is no provision for digital asset insurance in the US.

The Federal Deposit Insurance Corporation (FDIC) has partnered with the Federal Reserve in the Crypto Asset Policy Sprint to understudy how money flows in the cryptocurrency market and how it can involve banks. However, there is no stipulated time for when this study will be over.

Are your crypto assets protected?
Are your assets protected?

What Risks Do Cryptocurrency Companies Face?

Because every cryptocurrency exchange takes place online without leaving any tangible evidence, cyber theft is the most significant risk that any cryptocurrency organization must deal with. Additionally, because digital assets are decentralized, hackers can target cryptocurrency exchanges, businesses, and individual wallets because they know that such attacks would be challenging to track, let alone reverse.

The attack appears to become more complex as the crypto exchange system does. Social engineering is one of the most popular methods for accessing people’s private keys.

Hackers that utilize social engineering deceive people into giving them access to their money market deposits and savings accounts by disguising themselves as respectable institutions. By teaching consumers how to spot these scams, cryptocurrency companies can best help customers avoid falling for them.

Can you purchase personal crypto insurance?

Yes, but the policies available are still minimal. Most private cryptocurrency insurance in the market is bought mainly by exchange wallets and not necessarily by the consumer.

The policies available so far can only cover crime and theft, custodial insurance coverage, and business insurance. There are potentially more coverage policies, including the DeFi insurance, which would cover any loss incurred from losing your private key or the sudden shutdown of your crypto service provider.

How do you insure your crypto?

There are several ways to go about starting your crypto-insurance; you can choose to carry out the required research on your own and pick your own insurance company or broker that you believe is the best fit for you and your business, or you can employ a professional commercial insurance broker who will do the work in ensuring you get the possible policy on the market for you.

Factors That Affect The Cost Of Your Crypto Insurance

It might be challenging to outrightly pick and decide how much an insurance policy might cost. Generally, crypto business insurance in the US would cost between $400-$700 annually. However, some factors play a significant role in helping to estimate the cost of breach insurance.

  1. Size of Company
  2. Number of employees
  3. Historical value
  4. Annual revenue
  5. Policy limits.


While it might not look like a lot is going on in the crypto insurance industry right now, both the federal government and banks are working to bring more clarity and regulatory processes to the crypto industry, which will give more insurers the confidence to venture and offer more profitable services to investors.