Insurance Coverage Considerations for Cryptocurrency Losses

This article is a guide that examines insurance coverage considerations for cryptocurrency-related losses, co-authored by Carrie DiCanio and Peter Halprin for the New York Law Journal. It discusses emerging case law surrounding digital assets, focusing on issues such as crime coverage, physical loss requirements, securities classifications, and valuation challenges. The authors provide practical guidance for policyholders aiming to mitigate risks and secure effective insurance protection in the evolving landscape of digital assets and blockchain technology. The article highlights the challenges insurers face in providing coverage as the adoption of cryptocurrency increases, particularly in decentralized finance platforms and crypto-based employee compensation. It also reviews typical loss scenarios and key rulings, including the case of Bitpay, Inc. v. Massachusetts Bay Insurance Co., which illustrates the complexities of crime coverage in relation to cryptocurrency losses. The article aims to inform stakeholders about the current state of insurance coverage for digital assets.