Canadian Bitcoin Consortium launches insurance company for digital asset businesses

If you’ve ever spent time shopping for business insurance, you already know how frustrating it can be to navigate policies and premiums, let alone claims departments.

That experience can be even more difficult for cryptocurrency and digital asset businesses facing astronomically high premiums.

The Canadian Bitcoin Consortium (CBC) is trying to change that. “It’s historic for our space.

Our industry actually has its own insurance business now.

That is not a small milestone.” Last week, the CBC, a business advocacy group for the cryptocurrency industry, announced the launch of Blockchain Insurance Inc .

The company is what’s known as a captive insurance company, meaning it’s owned by the organization it insures; in this case, the consortium and its members.

The company doesn’t insure cryptocurrencies or a customer’s digital wallets; instead, it insures businesses that operate in, or are adjacent to, the digital asset space.

For most businesses involved in digital assets, the high risk associated with the industry—warranted or otherwise—can make obtaining reasonably priced business insurance difficult.

Koleya Karringten, the CBC’s executive director and president of Blockchain Insurance, said the company can offer its members discounts of up to 25 percent on premiums, bringing their rates down to levels lower than those they’re presently paying.

That matters a lot when you find out just how much Koleya says many in the crypto or crypto-adjacent space are paying in annual premiums. “For this industry to have directors and officers insurance to be a crypto trading platform, you’re looking at anywhere from $45,000 to $75,000 USD annually for $1 million in coverage,” Karringten said.

Those premiums are based mostly on a perception of risk surrounding the industry due to its relative lack of historical data, according to Karringten. “Oil and gas have 50 to 100 years of history, and [the insurance industry] understands the industry.

Healthcare, automotive: they understand,” she said. “This industry is 16 years old, and from an institutional perspective it has really only been around the last 10 years…that’s a real lack of historical data to determine what the risk is and based on that we have a perceived risk associated with the industry.” With its mission being to serve its member base, Blockchain Insurance bills itself as the first association-based captive insurance company for the digital asset industry.

There are other organizations that provide insurance specifically for the industry, like Bermuda’s Nakamoto, which serves Gemini Trust, but they are not operating through an industry association the way Blockchain Insurance is.

That means clients need to be CBC members, though they don’t necessarily have to be directly connected to bitcoin mining or cryptocurrency. “Almost every industry touches digital assets, from the bitcoin mining side to finance.

There’s very little that doesn’t touch it,” Karringten said.

That means the consortium’s membership, which includes financial institutions and accounting firms, can access the insurance offers regardless of whether they’re directly involved in cryptocurrency.

RELATED: Stablecoins are at a regulatory crossroads in Canada.

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