Cryptocurrency Custody / Crypto Business Insurance Estimator (2025)
Estimate how much coverage your digital asset business needs, and the potential cost of insuring cryptocurrency custody, exchanges, or Web3 operations.
Cryptocurrency custody insurance protects digital asset businesses from financial loss due to theft, hacking, fraud, or internal mishandling of crypto assets. It's typically required by institutional investors, exchanges, and custodians managing other people's digital funds.
Most policies are custom-written by specialty insurers (like Lloyd's of London syndicates or Aon crypto programs) due to the unique risks of blockchain assets.
This estimator models your potential premium using:
- Asset Value × Risk Coefficient
- Custody Type Multiplier (Hot vs. Cold)
- Regulatory & Security Factors
- Industry Benchmark Data (Aon, Marsh, Coincover)
Simplified Formula:
Estimated Premium = Asset_Value × Base_Rate × Custody_Factor × Compliance_Factor × Security_Factor
| Factor | Typical Range | Explanation |
|---|---|---|
| Base Rate | 0.0005–0.002 | 0.05%–0.2% of insured value |
| Custody Factor | 1.0–2.0 | Hot wallets = higher risk |
| Compliance Factor | 0.8–1.5 | Fully regulated = cheaper |
| Security Factor | 0.7–1.3 | Cold storage, multi-sig reduce risk |
| Crypto Business Type | Coverage Needed | Avg. Premium Range |
|---|---|---|
| Exchange (US) | $20M | $40K–$120K |
| Custodian | $50M | $80K–$200K |
| Wallet Provider | $5M | $10K–$40K |
| NFT Platform | $2M | $8K–$25K |
| DeFi Protocol | $10M | $25K–$80K |
| Crypto Hedge Fund | $10M | $15K–$60K |
- •Custody method: Hot vs. cold storage dramatically changes cost.
- •Security maturity: Multi-signature, MPC, offline backups lower rates.
- •Regulatory standing: Registered/licensed entities are preferred by underwriters.
- •Jurisdiction: U.S. and Switzerland have the most insurers offering crypto policies.
- •Asset volatility: Premiums rise with Bitcoin and altcoin volatility.
| Policy Type | Description |
|---|---|
| Crime Insurance | Covers theft, fraud, insider risk, or exchange hacks. |
| Professional Liability (E&O) | Protects against operational errors, system bugs, or negligence. |
| Cyber Liability | Covers data breaches, DDoS, and ransomware impacts. |
| Directors & Officers (D&O) | Covers lawsuits against executives. |
| Custody Insurance | Protects held digital assets directly (rare and limited capacity). |
- Total insured digital assets exceeded $2.4B globally (Marsh 2025).
- Only ~10 underwriters currently offer dedicated crypto custody coverage.
- Policies often include deductibles of $250K–$1M.
- Regulatory clarity in the U.S. and EU is expanding insurer capacity.
Q1: Does regular business insurance cover crypto losses?
A: No. Standard property or crime insurance excludes digital asset losses.
Q2: What's the minimum coverage size insurers offer?
A: Most underwriters start at $1M per policy and prefer cold-stored assets.
Q3: Can DeFi protocols get insurance?
A: Yes, via specialized DeFi risk pools or parametric coverage providers.
Q4: How do insurers verify custody practices?
A: Through due diligence reports, security audits, and proof-of-reserve attestations.
Q5: Who provides crypto custody insurance?
A: Lloyd's syndicates, Marsh, Aon, Coincover, and select Bermuda insurers.
- • Aon Digital Asset Risk Report 2025
- • Marsh Crypto Insurance Insights
- • Coincover Digital Asset Coverage
- • Lloyd's of London Digital Asset Guidance 2025