Crime / Theft-Loss
Loss of access to digital assets and fiat due to hacking is covered by crime/theft-loss policies.
When specialized for crypto, crime policies take into account the unique challenges of custody of private keys and the gradations of risk associated with storage systems and their relation to the internet.
In order to assess these risks, Evertas was the first to define and differentiate hot versus the many gradations of warm wallet warm wallets. You can see our wallet taxonomy definitions here.
Fidelity policies protect against loss of crypto or fiat due to the dishonest actions of a custodian’s insiders.
These risks are generally operational and can be mitigated through improved governance and internal controls.
Evertas Professional Services conducts assessments optimized for gauging the effectiveness of internal controls and thus improve a custodian’s fidelity insurability.
Tech Errors and Omissions (Tech E&O)
Sometimes called Professional Liability insurance, E&O policies protect companies, their employees, and other professionals whose actions (or inaction) results in someone experiencing a loss.
These policies often cover the costs of legal defense, settlements or judgments.
In the context of companies operating in the Web3 space, most companies needing E&O policies would likely need Tech E&O.
Also called slashing insurance, tech E&O offers protection when a loss results from a failure of technology. In the context of Web3, this usually means loss of access to digital assets resulting from software or hardware malfunction.
Evertas works with code auditing specialists to evaluate the risk of loss or assets due smart contract failure.
Our code auditor criteria are very exigent and include the requirement that auditors be able to provide a documented history of at least one year in operation with 50 or more successfully completed smart contract audits covering at least $100 million USD of value on active, liquid protocols.
Digital Property (NFTs)
Non-fungible tokens can be insured against loss due to technology failure. Policy frameworks vary depending on whether the NFT exists online or offline.
The Evertas policy framework for online NFT coverage tackles the substantial challenge of price determination. This process does take purchase price into account but takes the additional steps of considering floor price and rarity.
Offline NFTs are easier to value, since their value is tied to a more easily appraisable item in the physical world.
Much more information on NFT coverage is available here.
Losses caused by attacks on a custodian or mining operation’s website are covered by our cyber insurance offering.
Our cyber coverage is only available to custodians and miners.
Evertas protects crypto mining operations three ways: covering mining hardware, mining operations facilities and providing coverage against personal injury or property damage sustained on premises.
Those we most often insure include industrial miners, which own or lease the space where they operate; co-location and hosting providers, which manage others’ mining operations; and retail miners, which host their hardware with third party facilities.
The primary challenge confronting mining insurance underwriters is knowing how to accurately estimate the future value of damaged hardware, given a portion of that value is tied to the future value of the coins that they mine. Evertas solves this challenge through a combination of deep expertise and a specialized mining underwriting framework.
Evertas redoubled our commitment to protecting crypto miners through a key acquisition.
Directors and Officers (D&O)
This is protection against legal claims that might result from acts committed by a company’s directors and officers while doing their jobs.
D&O coverage is often required for leaders in emerging industries, such as Web3, given the risks involved.
Our crypto-specialized D&O policies omit policy features less likely to be required by a Web3 firm. For example, standard D&O offers public companies protection against shareholder lawsuits. Because most crypto companies have as their investors private equity or venture capital firms, and because private investors are less likely to sue their portfolio companies, that risk is omitted from our crypto-specific D&O, and premiums are lowered as a result.
More on the importance of D&O coverage can be found here.