Arch Insurance (UK) Limited has collaborated with Marsh to roll out what is described as the first offering of its kind to be placed in the specie insurance market.
Called “Blue Vault,” the new proposition is designed to deliver insurance protection for the secure storage of digital asset private keys – the alphanumeric data that enable the transaction of digital assets on a blockchain – held in traditional vault facilities.
The solution is backed by the likes of Lloyd’s of London syndicates Arch 2012 and Canopius 4444. Meanwhile, legal and technical consulting support is provided by Norton Rose Fulbright.
“When it comes to the critical risk around the generation and storage of digital assets, it is not just the way sensitive material is stored, but a complete and detailed understanding of the entire lifecycle of the private keys,” explained Arch’s vice president of fine art and specie James Croome (pictured).
“A breach at any stage could cause a financial loss for our clients, so it is the secure generation, transfer, and storage of knowledge, not simply the possession of data, that is our paramount underwriting consideration. The importance of this distinction cannot be overestimated and our insurance policy wording was very deliberately constructed to manage this risk.”
Blue Vault provides limits of as much as US$150 million and covers the loss of digital assets due to internal and external theft as well as physical damage or destruction of private keys. The policy is available globally.
“This is a significant step forward in digital asset insurance,” commented Ankur Kacker, vice president and specie expert on Marsh’s Digital Asset Risk Transfer (DART) team. “The secure storage of digital assets will continue to evolve as the regulatory landscape for this new asset class becomes clearer and financial institutions increasingly expect insurance to cover digital asset exposures.”