crypto insurance companies

5 Best Crypto Insurance Companies You Can Use to Protect Your Assets

Although cryptocurrencies faced a lot of criticism at first from the mainstream financial sector, the attitudes have changed in recent years. Today, several services have even been created to support the crypto industry including crypto insurance companies. These companies protect crypto assets similar to traditional insurance companies. 

But as in all things crypto, things are always done differently. Here are the 5 best crypto insurance companies we think you should know about. 

Lloyd’s of London

Known to many across the world, Lloyd’s of London is one of the earliest and most established insurance companies. What you probably didn’t know is that Lloyd’s entered the crypto insurance space in August 2018 when it became an underwriter to Kingdom Trust. 

The latter acts as a custodian of crypto private keys to individual and institutional investors. This helps in reporting crypto assets to regulators for efficient and transparent reporting. In March 2020, Lloyd’s backed yet another institution already among crypto insurance companies, Coincover. 

Coincover was created in 2018 to provide insurance for crypto assets along with its partner BitGo. It protects such assets from loss or theft so that investors can feel safer about their investment. Hacking and theft has become a problem in particular with hot wallets, so providing insurance should encourage further investment. 

With Lloyd’s providing backing through its panel of underwriters such as TMK and Markel, the insurance giant is making a further foray into crypto insurance. The insurance cover will range from as low as £1,000 up to £100,000, enough to cover most crypto assets. 

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Nexus Mutual

Compared to traditional insurance companies such as Lloyd’s, Nexus Mutual is wholly based on blockchain and runs on the Ethereum network. Founded in 2017 by Hugh Karp, the idea was to capitalize on the rising popularity of cryptocurrencies and the then nascent DeFi industry. The service would combine the decentralized nature of blockchain and insurance to become one of the first crypto insurance companies. 

Anyone can purchase insurance from Nexus Mutual from the company’s website. You need only state the value of cryptocurrency for which you would like cover and a small fee is charged. At the moment, the maximum cover is for 5,663 ETH valued at just under $20 million. In case of loss through the failure of a smart contract or crypto exchange, you then file a claim and provide details about your investment such as the wallet address. 

Being decentralized, decisions about claims are made by the community made up of Nexus Mutual members. To become a member, one simply needs to purchase the NXM token from the company as a stake in the company. After all, this is the nature of insurance mutuals. Any member can participate in decision making, but the higher your stake, the more significant your decision is. 

Nexus Mutual is the most popular crypto insurance company today and the NXM token has a market cap of $875 million. That shouldn’t be a surprise since Nexus has already paid out several claims since February 2020 and continues to grow in popularity. 

inSure DeFi

Also based on the Ethereum network, inSure DeFi is structured differently from Nexus Mutual. To receive insurance cover, you will need to purchase the network’s native token SURE equal to the value of crypto you would like to have covered. During the purchase process from the website, you will be able to see how much you can recover in case of theft, devaluation and scams. 

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The main difference between inSure and Nexus, though, is that backers of the project don’t stake individual claims but rather the SURE token itself. This way, all SURE holders can participate in decision making and the process is completely decentralized. 

By holding SURE, investors not only investigate claims but also earn new tokens as a reward for their stake in the company. With a market capitalization of slightly under $100 million, it’s clear that there are a lot of investors holding the token right now. 

Etherisc

You may have already heard of Etherisc through its crop and flight delay insurance. The latter was especially successful and won an award from the Digital Insurance Agenda in 2017. Meanwhile, crop insurance is currently being rolled out through the ACRE Africa programme; 17,000 farmers in Kenya have already been covered. 

For the most part, Etherisc acts as a typical insurance company. But through the use of blockchain technology, it is able to provide less costly coverage and more transparency compared to traditional insurance companies. 

Crypto insurance is still being designed and is yet to become active. Nevertheless, Etherisc has already proved to be a legitimate company and it is very likely that it will become a successful crypto insurance company. 

Medishares

A relatively new platform among crypto insurance companies, the service is similar to what Nexus Mutual offers. This is because the system randomly picks 3 members of the community to judge an application rather than the whole community with inSure DeFi. For insurance cover, you need to purchase the MDS token from the website. 

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Then in the case of theft, you file an application and wait 1 week for community members to voice their opinions and the juries make a final decision. As you can see from the above snapshot, the current maximum claim is 100,000 MDS tokens worth about $688 at the time of publishing. 

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