Investments in cryptocurrency markets are extremely volatile and investors should consult their financial advisor before making all investment decisions. We are not offering security advice. There is significant financial risk involving cryptocurrencies. Investors should only conduct transactions involving cryptocurrencies when they are certain of all pertinent facts about that cryptocurrency. Consult your financial advisor before making any investment decisions. A contract signed by electronic means is considered legally binding in the same way as a paper contract. Payments must be made in the exact cryptocurrency as was received, either Bitcoin, Ethereum, VeChain or Ontology. Transactions can never be reversed or undone. The cryptocurrency team accepts no responsibility for any losses resulting from transactions conducted or contracts accepted. The decision to trade lies solely with you, the investor. You are advised to consult your financial advisor before making all investment decisions. The content of this blog is for educational purposes only and should not be considered as an investment recommendation or advice. The cryptocurrency team accepts no responsibility for any losses you may incur as a result of your transactions.
While today’s policies might not explicitly cover such losses, certain traditional policies may also provide coverage. For those who hold or make payments in cryptocurrency, policyholders should consider reviewing actual policy language, case law and applicable guidelines from government agencies to assess available coverage for a particular proposed loss.
Cyber Insurance
Though crypto assets promise much, investors must first undertake due diligence and understand all the associated risks – including scams and hacking – before investing. If vulnerabilities were to be detected in any crypto wallet or exchange, fraudsters could crack their way in to digital accounts and steal private keys for accessing digital accounts and leaving investors with nothing. Losses and other costs following a cyber incidentare covered by cyber insurance policies, although typically with growing exclusion and scope requirements. There is a screening process for holding insurance policies, and at which criteria providers view certain applicants as having more risk than others – the size of business, annual revenue and so forth. For small businesses, breaches pose greater financial risk than larger enterprises – as they can reveal sensitive information that ripples outward when a company’s legitimacy starts to hemorrhage. So for all businesses, not just the big guys, setting up and maintaining good cybersecurity practices is a must, and the price that follows the initial quote for an insurance provider to underwrite how your firm currently manages risk and other occurrences will be the real cost.
Business Interruption Insurance
It reimburses lost revenue that a business would have collected had it not been forced to shut down following an insured loss or loss-producing event, and income that would have been generated from day-to-day operations, like rent or mortgage payments, lease expense at a temporary location, loan payments and employee payroll. Some business interruption coverage policies even provide contingent business insurance protecting damage incurred as a result of an interruption at an upstream supplier or business. This type of policy has become especially valuable in protecting businesses against interruptions at partners around the world during the Covid era. In many jurisdictions, the damage or loss must be ‘directly caused’ by a peril listed (or at least described) on the commercial property policy. For example, power outages or other events not related to a direct property loss might not be eligible – and, so, risk professionals would be wise to check their commercial property policy carefully to ensure that it includes Business Interruption coverage.
Crime Insurance
As a digital asset, it is susceptible to theft and hacking, but loss can frequently be covered by existing property, cyber – and directors and officers (‘D&O’) insurance. For gold miners, specie insurance has long been taken out to cover the assets if the gold is not available upon arrival to the site. Now, miners of cryptocurrency are turning to this product in order to protect their digital assets from risk. When a company applies for a crime and fidelity policy to be underwritten by certain underwriters, one or more underwriters consider whether the company has experience, systems or financial controls that signal experience, sophistication and good housekeeping. Strong financial controls, such as segregation of duties, inventory and controls, with a high-performance physical security system will tell an underwriter that such entities with good controls will experience less loss, thus entitling these insureds to less expensive premiums; those with a history of loss due to inadequate security will pay more in premiums; also, a deductible is a must in pricing a policy; each policy requires a payment that each insured must first make for the coverage to kick in.
Employee Dishonesty Insurance
If you suspect that your employees may not be completely committed to honesty, you might want to invest in employee dishonesty insurance. Also known as fidelity bonds, employee dishonesty insurance can provide protection against financial loss caused by theft, embezzlement, and fraudulent acts perpetrated by your business’s employees. While employee dishonesty insurance can cover nearly any circumstance, in most cases it covers only employees who have access to company funds or company property. Since it’s meant to be an insurance policy of last resort, employee dishonesty coverage has an annual sum (rather than a dollar-for-dollar) set premium, which you pay on an annual basis. Given the significant risk of employee theft of cryptocurrency, therefore, requiring an employee theft policy as part of a risk management programme makes sense. However, insurers will likely ask you to provide details about your cryptocurrency holdings (hot and cold storage systems, handling practices) and will require special endorsement language because crime policies cover tangible property only. Leading companies today should also consider the benefit of procuring other types of coverage as the industry grows, including directors and officers (D&O) liability coverage. D&O protects a management team from the costs associated with claims stemming from allegations of various misconduct by managers against their employer, including but not limited to complaints of improper or excessive use of company assets or their failure to follow the law of the workplace.