New York, NY (Oct. 12, 2022) – Lockton, the world’s largest independent insurance brokerage, is pleased to announce the creation of a new, industry-leading custody insurance facility available exclusively to its digital asset clients.
Developed by Lockton’s Emerging Asset Protection (LEAP) team in collaboration with leading global custody insurers, the facility is supported by Lloyd’s syndicates, together with highly rated insurance companies. This provides Lockton clients with market-leading policy wording and full access to London market capacity, estimated today to be in excess of $850 million for custody coverage.
Key benefits of Lockton’s new facility include:
- Efficiency, including access to full market capacity for custody coverage, without the need for third-party surveys.
- Flexibility, including the ability to secure bespoke programs, incorporating various limits and cost structures, designed to work alongside an insured’s existing and future risk management planning as it onboards custody of digital assets.
- A clear route to entry via a streamlined custody insurance underwriting process, managed by Lockton’s experienced LEAP team members.
Traditionally available through the London market, custody insurance (sometimes called “cold storage” coverage) provides indemnity in relation to private keys stored in secure locations, including those that are part of a multiparty computation (MPC) solution or entirely “offline.” In addition to providing coverage for the loss of assets, custody insurance plays a sizable role in risk mitigation by adding an extra layer of protection beyond technical and physical security for companies involved in the care, custody and control of digital assets or those providing technology to support custody solutions.
“Custody insurance plays a vital role in protecting consumer assets stored by third-party custodians and is an essential tool in the successful operation of many digital asset companies. Historically, securing that coverage has been difficult, often requiring complicated underwriting processes and the involvement of third-party surveys,” said Neil Daly, head of Lockton UK’s LEAP team. “Our new custody insurance facility makes it easier for companies operating in the digital asset ecosystem to build robust custody insurance programs, enabling them to better protect valuable digital assets and effectively serve their customers,” he said.
“This facility represents a step forward in insurance coverage for businesses in the digital asset custody space,” said Sarah Downey, head of Lockton’s global LEAP team. “Our LEAP team’s deep partnerships with both insurers and clients and our continued investment in and focus on innovation in this space, further exemplifies Lockton’s long-term commitment to helping the digital asset ecosystem continue to grow.”
Lockton’s Emerging Asset Protection (LEAP) team is a specialized, global group of more than 35 Lockton Associates with a deep understanding of companies operating in the blockchain and digital asset space. LEAP team members around the world — including in the U.S., U.K., Bermuda, Asia and Australia — have insurance brokerage and claims expertise spanning all financial and management liability lines of coverage, including directors and officers liability, crime, specie, cyber, employment practices liability and errors and omissions, among others.
What makes Lockton stand apart is also what makes us better: independence. Lockton’s private ownership empowers its 9,000 Associates doing business in over 125 countries to focus solely on clients’ risk and insurance needs. With expertise that reaches around the globe, Lockton delivers the deep understanding needed to accomplish remarkable results. Learn more at www.global.lockton.com.
Source: LocktonTags: Digital Innovation, launch