Insurance (INSURANCE)

Transparency and Fraud Reduction

Insurance uses blockchain to provide transparency, making it easier to detect and prevent fraudulent claims. It helps with identity management and real-time verification, which supports early fraud detection.

Smart Contracts and Automation

Smart contracts can automate insurance processes like policy approvals, endorsements, and premium calculations. This reduces administrative work and cuts costs for insurance companies.

Protection of Crypto Assets

Insurance protects cryptocurrency exchanges and users from losses due to hacks, theft, or cybersecurity breaches. Some exchanges have emergency insurance funds funded by trading fees to safeguard user assets.

Crypto-Native Insurance Solutions

There are blockchain-based insurance platforms that allow users to insure digital assets and smart contracts directly on the blockchain. These decentralized solutions pool capital and automate claims processes.

Improved Data Sharing and Efficiency

Blockchain enables secure, real-time data sharing between insurers, providers, and policyholders. This leads to faster claims processing, reduced paperwork, and better customer experiences.

Coverage for Crypto Businesses

Insurance covers risks specific to crypto companies, such as theft of private keys, cyber attacks, and operational liabilities. Policies are tailored to the unique needs of blockchain and crypto businesses.

Parametric and Crop Insurance

Blockchain supports parametric insurance by using trusted data sources (oracles) to trigger automatic payouts, such as for weather-related crop insurance, improving speed and trust in claims.

Reinsurance and Risk Management

Blockchain helps insurers share risk more efficiently through transparent and immutable records, improving reinsurance processes and financial protection for large claims.

Pros of Insurance

Insurance protects investors from losses due to hacking, theft, or technical failures, giving peace of mind and security for crypto assets. It can cover losses from exchange hacks, smart contract bugs, and loss of private keys. Insurance helps reduce exposure to risks and may encourage wider adoption of cryptocurrencies by lowering fear of loss. Some policies also assist with risk assessment and mitigation. For businesses, insurance can cover legal liabilities and operational risks.

Cons of Insurance

Insurance for crypto can be costly, with high premiums and deductibles that may not be worth it for small investors. Coverage is often limited, mostly available to institutions rather than individual users, and may exclude losses from market fluctuations or misplaced passwords. Many policies do not cover self-held private keys or exchange bankruptcies. The crypto insurance market is still new and evolving, with limited regulatory oversight and security standards, making risk assessment difficult.

Summary

Insurance offers valuable protection against certain crypto risks but comes with limitations like high costs and restricted coverage. It is more common for exchanges and businesses than for individual investors.

InsurAce

Founded by Oliver Xie in 2020, InsurAce is a leading decentralized insurance protocol providing DeFi insurance services.

Castle Funds

Founded by Matt Sitzmann, with co-founders Peter Eberle (president and CIO) and Dan Hoover (COO and chief compliance officer). Sitzmann launched Castle Funds in 2018 to bring crypto and insurance worlds together.

Blockchain Deposit Insurance Corp.

Co-founded by Becca Rubenfeld, who is also the chief operating officer.

Breach

Co-led in funding by crypto veteran and former Xapo executive Ted Rogers, though specific founders are not named.

Evertas

No specific founders mentioned, but it is noted as the world’s first company dedicated to crypto insurance backed by Lloyd’s of London.

No other specific founder names for Insurance are available in the provided information.

Investors in Insurance

Investors in Insurance include institutional players such as crypto custodians, miners, and operators of AI infrastructure who seek coverage to protect their operations and assets. Companies like Evertas, backed by Lloyd’s of London, provide high-limit policies tailored for these groups. Exchanges such as Coinbase and Bakkt also hold large insurance policies to cover assets stored in their custody, attracting institutional and retail investors who rely on these protections.

Insurance Providers and Backers

Insurance companies entering the crypto space often partner with established insurers like Lloyd’s of London to offer credible coverage. Firms such as Evertas and Canopius specialize in crypto insurance, providing tailored policies for theft, fraud, and cyber risks. Some exchanges, like Gemini and Binance, maintain their own insurance funds or commercial crime insurance to protect user assets, which indirectly supports investor confidence.

Market Demand and Investor Interest

There is growing interest from investors in Insurance as digital assets become more popular. Surveys show that many cryptocurrency holders would consider purchasing insurance if available, signaling strong demand. Institutional investors, hedge funds, family offices, and asset managers are increasingly adopting crypto and seeking insurance solutions to manage risks associated with digital assets.

Regulatory and Industry Influence

Insurance investors also include entities navigating regulatory environments in various jurisdictions such as the UK, USA, Australia, Canada, and Europe. These investors often require professional indemnity, cyber risk coverage, and crime insurance to comply with regulations and protect their holdings. The evolving regulatory landscape encourages more investors to consider Insurance as part of their risk management strategy.

Insurance

Insurance is generally considered halal when it follows Islamic principles, such as in the case of Takaful, which is a cooperative, Shariah-compliant form of insurance based on risk-sharing and ethical investments without interest (riba). Some scholars support the permissibility of insurance because it mitigates loss through pooling wealth, while others hold minority views against it. Overall, many scholars find Insurance halal, especially when it avoids prohibited elements like riba and gharar.

Cryptocurrency

Cryptocurrency can be halal if the project behind it complies with Islamic finance principles, such as avoiding interest (riba), excessive uncertainty (gharar), and gambling (maisir). Many Islamic scholars consider certain cryptocurrencies halal, especially those with clear utility and ethical compliance, but opinions vary. The halal status depends on the specific crypto and how it is used.

Insurance Crypto

There is no direct mention of "Insurance crypto" as a specific category, but combining the principles of Insurance and cryptocurrency, any crypto project related to insurance would need to comply with Shariah law to be considered halal. This means it should avoid interest, excessive uncertainty, and unethical activities, and ideally operate like Takaful insurance in a cooperative and transparent manner.

Short answer: Yes, Insurance is halal when it follows Islamic principles such as those in Takaful, focusing on risk-sharing and ethical investments.