Embroker Team March 27, 2023 10 min read

Insurance for Cryptocurrency Companies: What You Need to Know

A woman is pointing to a shield, wondering about cryptocurrency insurance for businesses

You don’t have to be involved with cryptocurrency to have heard about Bitcoin or Ethereum, maybe even Tether or Monero. These are just some of the most famous cryptocurrencies out there in the sea of cryptocurrencies. As of March 2022, there are  18,000 types of cryptocurrency in existence.

Blockchain and cryptocurrency were created as an alternative to regular currencies and, as such, are unregulated for a reason. Their popularity increased over the years, creating a whole new industry.

The rise of blockchain technology also brought new companies to the marketthe companies which base their business operations on the blockchain. Companies that need insurance for cryptocurrency to protect their operations. 

These companies have been around for a while now, and with the crypto market booming, the need for business cryptocurrency insurance increased. At the same time, the market is quite volatile, and the cryptocurrencies valuation fluctuates, which, together with the unregulated nature of the crypto industry, puts insurers off when thinking about providing coverage for these companies.

The insurance industry is heavily regulated, working on the same principles for ages. The rise of insurtechs has modernized the industry to a certain extent, but many insurance carriers are still reluctant to insure crypto companies.

Insurers assess risk based on the historical data they have about certain industries, and when it comes to crypto companies, there is no historical data available.

However, some insurers and brokers are prepared to take on the risk of insuring cryptocurrency companies. Enter insurance for crypto companies from Embroker.

What Businesses Need Cryptocurrency Insurance?

The short answer is that every business needs insurance to protect its assets and financial interests from any unpredicted event that could jeopardize its future, and the same goes for crypto companies. Examples of blockchain and crypto companies include:

  • Cryptocurrency trading
  • Performing crypto custody (guarding third-party assets)
  • Managing cryptocurrency assets
  • Providing a payment remittance platform

If your crypto business resides within one of these categories or another blockchain-related area, you should then strongly consider looking for the right coverages for your crypto company. If you are a crypto business owner and you are thinking about obtaining cryptocurrency insurance for your company, here are some things you should know.

Why Do Cryptocurrency Companies Need Insurance?

Tw people are looking confused over their cryptocurrency insurance needs for the business.


Most cryptocurrency companies are startups, and as such, they have a lot on their mind when looking to grow their business. The startup ecosystem is very fast-paced, and companies must keep up to survive.

Side note – if you’re just starting out, make sure to read our guide on how to start a crypto business.

Focusing on finances, hiring, and developing business operations often takes business owners’ minds off risk management and insurance, which can be dangerous.

Like every other business, cryptocurrency companies face numerous risks in their daily operations. The volatility and instability of the crypto market bring a considerable amount of risk.

Given that we are talking about an industry that’s brought a lot of novelty, cryptocurrency companies are still a bit of a mystery to the business world, including the insurance industry.

Even though these companies have been around for a while now, insurance carriers are still reluctant to provide them with the necessary coverages because of their very unique risk exposure. It’s a fact that crypto companies can’t handle all the risk on their own, and they need to transfer some of it to an insurer who will provide a safety net for them.

Insurance is crucial for cryptocurrency companies as they need all the assistance they can get to protect their digital assets. Many regulatory inconsistencies are not making their lives any easier, and neither is having to navigate market volatility.

Some crypto companies are in the exchange business, and some are lending companies. Their risks are closely tied to the volatility of the cryptocurrencies, but they also have some additional exposure related to their specific industry.

What Risks Do Cryptocurrency Companies Face?

A person is holding their head in their hands, stressing out and thinking about the risks their company faces and cryptocurrency insurance that could help.

The sole nature of cryptocurrency indicates that most risks these companies face are related to the online world. Cryptocurrency is, after all, a digital currency that doesn’t have its physical form, and all trading, investments, and payments are conducted online.

That’s why the most prominent risk for crypto companies is the risk of a cyberattack. Cybercriminals target crypto companies because cryptocurrency can be extremely hard to trace once they start moving funds around.

Even if a company has robust cybersecurity measures in place, hackers are constantly looking for new ways to attack, and their activities are becoming increasingly sophisticated.

Social engineering is also a common way for hackers to access your network. They pose as a legitimate and trustworthy source and trick one of your employees into giving them a free pass to their accounts or your internal system.

Social engineering attacks are a significant threat to your online safety, and the only way to prevent them is to educate your employees on how to recognize them.

Once hackers access your systems, there’s nothing to stop them from stealing your coins. It can take you days to discover the breach, and the damage will have been done by then.

Cybercriminals can also decide to take your data hostage. For example, they can take your credentials or confidential client information and request ransom payment in cryptocurrency to release the data back to you.

If you provide services related to your business or are in the service-providing business, you also face the risk of making a professional error or omission. For example, if you advise your client to invest coins in the wrong fund, and they end up losing money in return, you can expect them to sue you for bad advice.

It’s true that the named risks are not specific to cryptocurrency companies, but their risk profile is unique because of their industry. If we tie that to the general uncertainty of the blockchain industry, we can see why insurance carriers are still reluctant to insure these businesses.

However, some insurers are ready to take some amount of risk from crypto companies and provide them with adequate cryptocurrency insurance policies. Let’s look at the policies all crypto companies should consider purchasing.

What Are the Industry-Specific Cryptocurrency Insurance Policies?

Two people discussing the cryptocureency insurance needs for cryptocurrency businesses

Every insurance policy can and should be tailored to your specific needs. What you will see below are the policies that need a bit more coverage adjustment to ensure they cover your unique risks. 

Your insurer will like to know what kind of wallets your company uses and if you have any cold storage systems. If you rely on third parties to manage cryptocurrency holding, your insurer will also want to know that. You should be prepared to answer numerous questions about your business operations.

Let’s see what specific cryptocurrency insurance policies your company should purchase.

Directors and Officers

A directors and officers (D&O) insurance policy is a policy that protects you and your executive team from the claims stemming from your work as the company management. Those claims usually include a breach of fiduciary duty, misuse of company funds, not complying with workplace laws, and a lack of corporate governance.

If you are wondering who could sue your leadership for such a deed, the answer is a whole range of people, such as investors, vendors, customers, and even employees. To ensure your D&O policy covers your particular exposures, work with a broker who can point out the specific policy extensions you might need.

Beware that if you have raised venture funding, your investors will require that you carry a D&O insurance policy because it would also protect their interests.

Errors and Omissions

Every professional in the business of offering services or advice to people should strongly consider obtaining an errors and omissions (E&O) insurance policy, otherwise known as professional liability or professional indemnity insurance. Professional liability insurance is designed to indemnify you from claims of malpractice, negligence, or professional error, among others.

As someone looking for insurance for a cryptocurrency company, you should also look into the technology E&O policy. A tech E&O policy aims to provide indemnity to professionals in the fast-growing technology industries. Since your company relies heavily on technology and coding, a code error that could result in a security breach can also be a trigger for an E&O claim.

Cyber Liability Insurance

When researching what coverage to get, a cyber insurance policy is probably the policy you should pay the most attention to. As you collect and store passwords and confidential information, you have an obligation to keep that information safe. You should also be careful with handling transactions and sending/receiving payments online.

If a data breach occurred and hackers gained access to your confidential data or stole cryptocurrency from your online “hot” wallets, a cyber liability insurance policy would kick in and help you recover your data and cover your loss of revenue caused by the data breach.

Suppose that the breach compromised your client’s systems as well. They could then decide to sue you for damages, and a third-party cyber insurance policy would respond to those claims. An extensive policy would cover most of your costs, including credit monitoring, notification and investigation costs, computer forensics, and civil and reputational damages.

Commercial Crime Insurance

Another coverage that is vital for cryptocurrency and blockchain companies is commercial crime insurance coverage. It provides indemnity against losses stemming from cryptocurrency theft. A crime insurance policy would reimburse you for the loss of the digital assets you were storing in your “hot” wallets.

Theft and fraud are common in the digital world, and the cryptocurrency industry is not spared. If the theft happens, you’d want your insurer to provide a financial safety net to help you bounce back and keep your company running.


The primary definition of specie insurance coverage is a specialized insurance product that protects highly valuable, portable assets. You may be wondering why you would need this coverage if your valuable assets are digital. This particular coverage covers losses to your cryptocurrency assets when you store them offline in the “cold” wallets.

The policy would also cover the loss of or damage to the cryptocurrency while it is in transit or at a third-party location. It pays for the damages to private keys in the unconnected wallets.

What Other Insurance Policies Do Cryptocurrency Companies Need?

To a certain extent, crypto businesses are just like all others, and their insurance needs are not that different. We’ll start with basic insurance coverages that all companies with employees need.

Commercial General Liability

Commercial general liability insurance provides indemnity against the potential claims of third-party injury or property damage. It can also cover the claims of negligence to a certain extent. It is a suitable policy for every business, big or small, covering every company’s primary risk exposure.

A general liability insurance policy protects companies and their business assets from losses stemming from defending the claims of third-party injuries. The policy can also include some form of product liability coverage and respond when your customers claim your product or accompanied service harmed them in any way.

Your general liability insurance policy would pay for your legal costs (such as providing you with legal representation, potential settlements, or court fees) and the potential lack of income to keep your company running during the course of the lawsuit.

Workers Compensation

Suppose an employee gets injured at the workplace. In that case, workers compensation pays for medical bills, rehabilitation costs, lost wages, and even death benefits to the family in the case of a fatal outcome. Your policy should also cover your legal fees if the employee decides to sue your company.

Should the employee claim that your negligence caused the accident and their injury and sued your business, workes comp would not respond to that lawsuit. The policy that would help you defend that kind of lawsuit is the employer’s liability insurance policy.

Note that workers comp is mandatory for every business with employees in most states, except Texas. Also, Ohio, Wyoming, Washington, and North Dakota are monopolistic states that require companies to purchase their coverage through a state fund.


Employment practices liability insurance (EPLI) protects your company if an employee files a claim of illegal employment practices, such as discrimination, harassment, wrongful termination, or retaliation. Employees can sue you if they feel like your company did anything that violates their legal rights.

An EPLI policy would only cover your costs of defending the lawsuit if your actions were not illegal. It doesn’t matter if you won or lost the case, your insurer would pay for the legal costs, potential settlements, or judgments that the court awarded.

How Much Does Cryptocurrency Insurance Cost?

A person is looking at a piggy bank, wondering how much cryptocurrency insurance costs

Business insurance for cryptocurrency and blockchain companies is still a new field, and, as we already mentioned, insurers are still reluctant to insure these businesses. That’s why it is also challenging to estimate the average insurance price for cryptocurrency companies.

As with any other company, there are a few factors that influence how much you’d have to pay for cryptocurrency insurance:

  • Company size
  • Number of employees
  • Annual revenue
  • Claims history
  • Policy limits

The average cost of a general liability insurance policy for crypto businesses in the U.S. is between $400 and $700 a year. The price of other policies also depends on the factors listed above and your specific business characteristics and actions.

For example, having a disaster recovery plan, a cyber-incident response plan, and proof of implementing robust cybersecurity measures would benefit the price of your cyber insurance policy. A cybersecurity expert on board or as a hired contractor would also imply that you take security very seriously, and your insurer will appreciate that when writing your cyber and crime insurance policies.

Insurance for Cryptocurrency Companies: The Takeaway

Government institutions, like the Securities and Exchange Commission (SEC) or the Office of the Comptroller of the Currency (OCC), are making efforts to bring more regulatory clarity into the crypto industry. More and more banks and financial institutions are considering adopting cryptocurrencies as digital assets and investing in the industry.

All that should positively influence the insurance industry as well, and insurers will have more clarity and confidence in writing the policies for cryptocurrency businesses.

If you need more information about cryptocurrency insurance for your cryptocurrency company, you can get started by reaching out to our experienced brokers. If you are ready to get your online quote, you can start by filling out this form.

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