Superscript, a UK startup and Lloyd's of London insurance broker, has launched a dedicated product for crypto businesses.
"Daylight," the name of the new insurance offering for businesses with digital assets, begins with technology liability and cyber insurance that serves as protection against everything from ransomware attacks to unintentional copyright infringement.
In recent years, cryptocurrency and insurance have not fared well due to a lack of capacity in the market and the fact that many major crypto exchanges have simply opted to self-insure and hold bitcoin reserves to cover their losses, typically in the event of a hack of "hot" or internet-connected wallets.
Superscript, which participated in the Lloyd's Lab Accelerator last year, said the first crypto companies to buy tech and cyber insurance are Argent, Chiliz and CEX.
"In addition to protecting physical digital assets, there are a whole host of other risks that need to be covered as well," Ben Davies, head of digital assets at Superscript, said in an interview. "So if a platform goes down or there are data breaches, ransomware attacks, contract breaches, copyright breaches, IP breaches. All of that needs to be covered for crypto companies to become mainstream."
In 2021, there were only 350 brokers licensed to trade NDLs. Superscript claims to be the first Lloyd's broker to offer a dedicated product for digital assets; Lloyd's approved policyholder status was granted to Evertas earlier this year. (Lloyd's policy is not to promote individual products, and therefore the company has not made an offer to Daylight, a Superscript representative said via email.)
According to Davies, however, Lloyd's is slowly but surely moving closer to cryptocurrency. "I would say the winds are shifting a little bit for Lloyd's in terms of digital asset risk," he said.