Protecting your digital assets business

Navigating the insurance landscape for digital asset and cryptocurrency businesses can feel like an uphill climb. You’re in an emerging sector with unique risks that are constantly evolving — so it’s no surprise that traditional insurers often shy away.

Whether you’re established in this space, or just starting out, let’s unpack the basics of insurance for digital assets businesses, so you can put your best foot forward when buying cover.

Weighing up the risks

The world of digital assets is unpredictable. Market volatility, regulatory changes and cyber threats are everyday concerns. While the opportunities in this booming sector are significant, so are the risks.

But interestingly, these risks aren’t that much different from any other emerging tech business. In fact, 100% of the web3 claims we process for clients at Superscript, come from off-chain risks. This might feel like a surprise considering the complexities of on-chain products within the digital assets industry, but it’s often the places people overlook that turn out to be the most important.

Before diving into your insurance options, it might be more beneficial to identify your risks and potential losses. Firstly, you’ll want to understand your exposure to the myriad of risks your business faces.

This could be anything from an employee tripping on some loose wires in the office and breaking a bone, to a large-scale data breach. Then consider the impact a claim could have on your brand and your bottom line.

Consider everything from the small stuff — an accidental spill on a client’s laptop — to the worst-case scenario, like hackers holding your data for ransom. Could an uninsured claim derail your business? If the answer is yes, then securing cover is probably vital.

Why bother with cover?

Insurance exists to shield your business from financial shocks, protecting your balance sheet and assets when the unexpected strikes. Without it, you’re leaving yourself exposed to losses that could have been avoided.

For businesses, success often starts with learning how to sidestep failure. It might sound simple, but some of the most successful companies thrive because they focus on managing their downside risks. And insurance is one of the smartest tools in the kit to help you do just that.

By securing the right cover, you’re not just managing risk — you’re freeing up time, money and resources to focus on what matters: achieving your ambitions. Plus, having insurance in place sends a strong message to your clients. It shows you’re serious about protecting their interests and building trust in a growing, yet unpredictable, ecosystem.

What cover should a digital assets business consider?

Every business is unique, but we’ve identified four types of cover that are particularly important in the digital asset space:

Cyber insurance

The majority of your business is online, making it a prime target for cyber-crime. Cyber insurance is designed to protect businesses that operate online or are exposed to the internet and the risks that come with storing and handling data when running a business. It’s there to support businesses if they’ve been affected by cyber-attacks, data breaches, fraud and system failures.

Want to know how to protect your business against cyber-crime? Read our ultimate guide to cyber-security.

Professional indemnity insurance

If you’re offering advisory or trading services, professional indemnity could be beneficial. If a third party accuses you of professional negligence, having professional indemnity insurance may help to cover any associated legal costs.

Crime insurance

Crime insurance is designed to protect businesses against financial losses caused by fraud, theft or dishonest acts, whether committed by employees or third parties. For digital assets businesses, this cover could be invaluable in safeguarding funds and assets from the heightened risk of cyber-crime and fraud targeting the crypto and blockchain sectors.

Directors’ and officers’ insurance

Directors' and officers' insurance, also known as management liability insurance — D&O insurance for short — exists to protect entrepreneurs from the risks associated with running a business.

It’s designed to provide three-sided protection. One side aims to cover directors personally for fines, penalties and legal expenses. The second is built to reimburse the company for paying on behalf of the directors. And the last can cover the company should it be named in a lawsuit. If you’re looking to get investment, D&O cover is often a requirement in term sheets.

What are the most common questions founders ask?

When you’re looking to cover your digital assets business, you probably have a bunch of questions. You’re an expert in digital assets, not insurance. And that’s one of the reasons you’d team with a broker who truly understands the digital asset industry.

When we speak to founders, we usually get asked three big questions:
What does the policy cover?
How much will it cost?
How quickly can we get it sorted?

For new clients, we’ve created a handy digital asset overview document. This lays out what we bring to the table and what the process involves, so you’ll know exactly what to expect from the start.

We also offer a complimentary insurance health check, so you can understand your current cover and if you have any gaps. Our specialist team can provide expert advice on risk management and build bespoke cover for your specific needs.

Want to learn more? Reach out to learn how we can support your business today.