Cryptocurrency Insurance Explained

You must have heard about cryptocurrency as it seems to be the trending issue across the globe. There are some risks that are associated with cryptos and as such an aspect of insurance is imperative. In this article, we discuss what it is and how you go about getting insured.

What Is Cryptocurrency Insurance?

Cryptocurrency Insurance is exactly as it sounds, an insurance policy for your cryptocurrency assets should any eventuality happen to them. It is a policy that protects your assets in case they are lost or stolen as well as protecting you against harmful regulatory actions such as fines and imprisonment.

Why Insurance For Cryptocurrencies?

The main purpose of insurance is to protect the insured party from any losses which may be caused by an unexpected event. In the case of cryptocurrencies, the losses may be caused by many factors one of them being cyber threats. Cyber threats are on rising each day and hackers are becoming more sophisticated than before. 

Other than that it is possible for your cryptos to simply get lost when you lose access to your private keys or even when you die without passing on your private keys or mnemonic phrase to your heirs.

How To Get Insurance For Cryptocurrencies?

You can get cryptocurrency insurance from either a broker or an insurance company. Because there are not many companies offering this type of insurance, it is mostly done through brokers and other legitimate platforms like Bitcoin Up. The process involves filling out an application form and supplying all the necessary information which you think may be required to have you covered.

Is Insurance For Cryptocurrencies Necessary?

In as much as blockchain has been touted as the safest technology, it is not infallible and there are some risks associated with cryptos. In that case, there is a need for insurance because no matter how safe blockchain technology claimed to be, it cannot compensate for any loss suffered as a result of theft, cyber-attack, or other similar events.

What Are the Potential Risks Facing Cryptocurrencies?

As a store of value and a financial asset, it is very much susceptible to cyber-attacks. The media has been awash with news of people losing their funds as a result of hacks on wallets and exchanges. There have also been cases where investors lost their portfolios because they were hacked or simply got misplacing their passwords.

Another risk that is very common with cryptocurrencies is loss of funds as a result of sending to the wrong address or even losing access to your private keys and details which you require to recover them. Now that we have established how to get insurance for cryptocurrencies and some risks facing cryptos, it’s time we looked at some companies offering this type of insurance.

Conclusion

In conclusion, it is imperative to have insurance for your cryptocurrencies because no matter how safe the technology used to secure the coins is, there are still some losses that can be caused by various factors and therefore an insurance policy may come in handy. In times like these where attacks are on the rise, it is good to be proactive rather than wait until you’re faced with a huge loss before taking action.

With a clear understanding of cryptocurrency insurance, you can now act fast. There are some companies that offer insurance for your cryptocurrencies and if you’re interested, do more research on them so that you find the best one to work with. Remember it is better to be safe than sorry after all. it is advisable to have your crypto assets insured and protected against all possible risks and attacks.