Crypto Insurance Providers: Coverage, Premiums, and Claims

Crypto Insurance Providers Compared

Crypto insurance protects digital assets against theft, hacking, custodial failure, and smart contract exploits. Unlike traditional finance, where FDIC and SIPC backstop depositors, crypto holders bear full loss risk unless they purchase dedicated coverage. Roughly 89% of crypto holders remain uninsured, representing a protection gap that exceeds $1 trillion in uninsured digital assets globally.

The February 2025 Bybit hack, in which North Korea's Lazarus Group stole approximately $1.5 billion in ETH, exposed the limits of the current insurance market: no single insurer or syndicate has the capacity to cover losses at that scale. This guide compares the major crypto insurance providers, their coverage structures, and the tradeoffs between centralized and decentralized models.

For a comparison of how specific custodians insure the assets they hold, see our crypto custody insurance comparison.

Provider Overview

The crypto insurance landscape spans crypto-native underwriters, decentralized mutual protocols, and traditional Lloyd's of London syndicates entering the space. The following table summarizes the major providers.

Evertas

Evertas (formerly BlockRe) is a Bermuda-licensed insurer focused exclusively on digital assets. Backed by Lloyd's syndicate member Arch and the Accelerant Risk Exchange, Evertas expanded its per-policy limit to $420 million in June 2023, making it one of the highest-capacity crypto-native insurers. The company has raised $19.8 million in outside investment, led by Polychain Capital.

Coverage spans custodial crypto asset loss and theft, crypto mining hardware (up to $200 million), platform failure, insider theft, Directors & Officers liability, and digital property including NFTs. Evertas handles the full lifecycle from underwriting through crypto-forensics investigation to claims settlement. Policies are bespoke, designed for institutional clients: exchanges, custodians, funds, family offices, and mining operations.

Evertas also partnered with Nayms to enable insurance settlements payable on-chain via Ethereum, and acquired crypto mining specialist Bitsure to expand its mining coverage capabilities.

Coincover

Coincover, founded in 2018 in Cardiff, Wales, provides a combined protection and insurance product. Its policies are underwritten by Lloyd's syndicates including Atrium, TMK, and Markel through the Lloyd's Product Innovation Facility. Coincover currently protects over $300 million in crypto across 15,000+ wallets covering 200+ cryptocurrencies.

The product line includes two components: Coincover Protect (theft prevention with transaction screening plus insurance) and Coincover Recover (encrypted key backup and disaster recovery). Coverage starts from GBP 1,000 and uses dynamic limits that adjust with crypto price fluctuations, a structure designed for hot wallet environments where balances shift constantly.

Coincover's claims process targets a 48-hour payout window once a claim is approved, with no deductible on valid theft claims. The company completed a SOC 2 Type II audit in February 2025 and has partnerships with BitGo, Cobo, and Taurus. For institutions using MPC wallet architectures, Coincover integrates at the key management layer to provide both recovery and insurance.

Nexus Mutual

Nexus Mutual is a decentralized insurance alternative structured as a UK discretionary mutual. Rather than relying on traditional underwriters, it pools capital from NXM token holders who stake against specific risks. The mutual's capital pool stood at approximately $190 million as of mid-2025, with roughly $194 million in active coverage underwritten at any given time.

Coverage types include protocol cover (smart contract exploits), custody cover (centralized exchange failures), and yield token cover. Nexus Mutual is also developing slashing protection for Babylon Bitcoin staking. Cover fees dropped below 1% annually for select low-risk, well-audited protocols in early 2025, though riskier protocols command higher rates. The mutual earned $5.7 million in cover fees in 2025.

Nexus Mutual is the only major crypto insurance provider with fully transparent, on-chain claims data. Total claims paid through 2025 exceed $18.5 million:

Claims are assessed by NXM token holder vote. Cover holders submit within 35 days of the coverage period and stake 5-10% of locked NXM tokens. Valid claims target a 2-6 calendar day payout. Fraudulent submissions forfeit the staked tokens. Membership requires KYC/AML verification and a 0.002 ETH fee.

Lloyd's of London Crypto Syndicates

Lloyd's of London is not a single insurer but a marketplace of specialized syndicates. Several are now active in crypto, bringing centuries of underwriting expertise and significantly larger balance sheets than crypto-native providers.

Key syndicates include Atrium (creator of the first crypto wallet liability policy for Coincover), Arch (backing Evertas), and Canopius (lead on Copper's $500M specie policy). In March 2024, insurance broker Marsh launched an $825 million facility backed by Lloyd's syndicates specifically for cold storage and MPC custody coverage. Marsh also introduced MiCAssure in late 2024, an insurance product designed to help crypto asset service providers comply with the EU's MiCA regulation.

In July 2025, Native (a crypto insurance broker) launched the "Risk Collective" backed by Lloyd's underwriters Mosaic Insurance and Chaucer. This initiative partners with cybersecurity vendors (Hacken, Hypernative, and others) to offer lower premiums for companies that use vetted security tools: a model that rewards better risk management with reduced costs.

Other Providers

Several newer entrants address specific gaps in coverage.

Relm Insurance, a Bermuda-licensed insurer founded in 2019, holds the first Innovative Insurer General Business licence in Bermuda. Relm covers cyber, crime (including hot wallet theft), professional liability, staking losses, exchange default, and even kidnap and ransom for Web3 executives. Relm also launched Relm II, the first fully regulated crypto-collateralized reinsurance business.

Breach Insurance (Boston, USA) targets both retail and institutional markets. Its Crypto Shield product, backed by Relm as reinsurer, was one of the first to let individuals purchase wallet insurance directly. Crypto Shield Pro extends coverage to institutional custody arrangements.

On the decentralized side, InsurAce and OpenCover offer alternatives to Nexus Mutual for protocol cover and stablecoin depeg protection, though with smaller capital pools.

Coverage Types and Exclusions

Crypto insurance policies typically break down into several coverage categories. Understanding which risks a policy covers (and which it excludes) is critical for institutions performing due diligence on custody solutions.

Note: Nearly all crypto insurance policies exclude market volatility, user error (sending to wrong addresses, lost passwords), private key loss by individual holders, fraudulent investment schemes (rug pulls), regulatory seizures, and war or state-sponsored attacks. The Bybit hack, attributed to a state-sponsored group, raises open questions about how the war exclusion applies to nation-state cyber operations.

Premium Structures

Crypto insurance premiums typically range from 1% to 5% of covered asset value annually, with most institutional policies falling between 1% and 2.5%. Premiums for exchange hack coverage rose approximately 35% year-over-year as of Q1 2025, reflecting increased loss severity and limited underwriting capacity.

Key factors that influence premium pricing:

• Ratio of assets in hot versus cold storage (cold storage commands lower premiums)
• Security maturity: SOC 2 certification, penetration testing cadence, and use of hardware security modules
• Claims history and operational track record
• Regulatory profile and jurisdiction
• Asset types covered (Bitcoin and ETH are easier to insure than long-tail tokens)

Decentralized protocols like Nexus Mutual price cover dynamically based on capital staked against each protocol. Well-audited, low-risk protocols can achieve rates below 1% annually, while newer or riskier projects pay significantly more.

A persistent challenge for actuaries is the lack of historical loss data. Traditional insurance relies on decades of claims history to build actuarial tables. Crypto insurers instead use scenario modeling, blockchain analytics, and security assessments to estimate risk: a fundamentally different approach that contributes to wide premium variance between providers.

Regulatory Landscape

Regulatory requirements for crypto insurance are tightening, particularly in the EU. The Markets in Crypto-Assets (MiCA) regulation, effective December 30, 2024, requires crypto asset service providers (CASPs) to maintain prudential safeguards through own funds, insurance, or a combination. Article 67 mandates coverage across seven risk categories including operational breaches, asset safeguarding negligence, and system disruption.

In the US, the SEC allows state trust companies as qualified custodians for crypto if advisers verify authorization and review audited financials. There is no explicit federal mandate for crypto custody insurance, but SEC custody rules impose safeguarding requirements that effectively push institutions toward insurance coverage. For a broader view of how regulation interacts with self-custody and institutional custody, see our research on custodial versus self-custodial wallets.

The Protection Gap

The crypto insurance market remains severely underpenetrated. Only 11% of crypto holders carry any insurance, and less than 2% of the DeFi ecosystem has coverage. Only 22% of crypto exchanges maintain comprehensive hack coverage. This gap represents both a systemic risk and a market opportunity: 42% of uninsured holders have indicated willingness to purchase coverage, with an additional 26% open to considering it.

The capacity problem compounds the coverage gap. Even the largest Lloyd's facilities (Marsh's $825 million) could not have covered the $1.5 billion Bybit loss. Bybit ultimately recovered approximately 94% of its reserves within weeks through market operations, but the incident made clear that the insurance market cannot absorb mega-scale events. As crypto markets grow and institutional allocations increase, closing this gap will require both more underwriting capacity and better risk modeling.

For institutions evaluating custody arrangements on Bitcoin, including solutions built on Spark and other Layer 2 protocols, understanding insurance availability is as important as evaluating the security architecture itself. The MPC wallet and multisig designs used by most institutional custodians directly affect insurability and premium costs.

How to Choose a Crypto Insurance Provider

Selecting an insurance provider depends on what you are protecting, how much coverage you need, and whether you operate in traditional or decentralized finance.

• Institutional custodians holding assets in cold storage should evaluate Evertas or Lloyd's syndicate-backed facilities (via Marsh or Aon) for the highest coverage limits
• DeFi protocols and users seeking smart contract exploit protection should consider Nexus Mutual, which offers transparent pricing and on-chain claims resolution
• Retail users and smaller operations can access coverage through Coincover (via partner custodians like BitGo) or Breach Insurance's Crypto Shield product
• EU-based CASPs needing MiCA compliance should explore Marsh's MiCAssure product or work directly with Lloyd's brokers
• Exchanges and protocols with complex risk profiles should engage Relm Insurance for tailored packages covering cyber, crime, staking, and executive protection

Regardless of provider, verify the policy's exclusion list carefully. The most common gap is between what clients believe is covered (any loss of crypto) and what the policy actually covers (specific loss events under defined conditions). Always confirm whether state-sponsored attacks, social engineering, and user credential compromise fall inside or outside your policy scope.

Frequently Asked Questions

Is crypto covered by FDIC insurance?

No. FDIC insurance covers US dollar deposits at FDIC-insured banks, not cryptocurrency holdings. Some exchanges like Coinbase offer FDIC pass-through coverage on USD cash balances (up to $250,000), but this applies only to the fiat portion, not to any crypto assets. Dedicated crypto insurance from providers like Evertas, Coincover, or Nexus Mutual is required to protect digital asset holdings.

How much does crypto insurance cost?

Premiums typically range from 1% to 5% of covered asset value per year. Institutional policies for cold storage custody with strong security practices often fall in the 1% to 2.5% range. DeFi protocol cover through Nexus Mutual can drop below 1% annually for well-audited, low- risk projects. Premiums for exchange hack coverage rose roughly 35% year-over-year in early 2025 due to increased hack severity and limited insurer capacity.

What does crypto insurance not cover?

Nearly all crypto insurance policies exclude market volatility, user error (such as sending funds to an incorrect address), private key loss by the holder, rug pulls and fraudulent investment schemes, regulatory seizures, and losses from war or terrorism. Many policies also exclude account takeover resulting from compromised user credentials, which means phishing attacks that steal login details (rather than exploiting the platform itself) often fall outside coverage.

How does Nexus Mutual differ from traditional crypto insurance?

Nexus Mutual is a decentralized mutual, not a traditional insurance company. Coverage is funded by a shared capital pool from NXM token holders, and claims are assessed through token holder voting rather than an internal adjuster. This provides full on-chain transparency (all claims data is public) but introduces governance risk: claim outcomes depend on token holder consensus. Membership requires KYC verification and a small ETH fee.

Can individual investors buy crypto insurance?

Yes, though options are more limited than for institutions. Coincover offers retail protection through partner custodians (coverage starts from GBP 1,000). Breach Insurance's Crypto Shield product is designed for individual wallet holders. Nexus Mutual is accessible to any KYC-verified member. For most retail investors, the practical approach is to choose a custodian or exchange that carries its own insurance (such as Coinbase or BitGo) and understand exactly what that policy covers.

What happened with the Bybit hack and insurance?

In February 2025, the Lazarus Group (attributed by the FBI to North Korea) stole approximately $1.5 billion in ETH from Bybit, making it the largest crypto hack to date. The incident exposed a fundamental capacity problem: no single insurer or syndicate had sufficient coverage to absorb a loss of that magnitude. Bybit recovered roughly 94% of its reserves through market operations rather than insurance payouts. The hack has since accelerated demand for higher-capacity policies and raised unresolved questions about whether state-sponsored cyberattacks trigger war exclusion clauses in existing policies.

Does MiCA require crypto companies to have insurance?

MiCA (effective December 30, 2024) requires EU crypto asset service providers to maintain prudential safeguards through own funds, insurance, or a comparable guarantee. Article 67 specifies seven risk categories that must be covered, including operational breaches and asset safeguarding negligence. Insurance is one of three permitted mechanisms, not the only one: companies can alternatively meet requirements through minimum capital reserves. Custodial wallet providers must hold at least EUR 350,000 in qualifying capital.

This tool is for informational purposes only and does not constitute financial or insurance advice. Coverage details, premium ranges, and provider capabilities change frequently. Always verify current terms directly with providers and consult a licensed insurance professional before purchasing coverage.