BitGo, the early pioneer in multisignature technology, has secured insurance coverage against theft of up to $250,000 for all of its account holders. Customers can purchase additional coverage for an additional fee of 1% of the coverage amount.
Bitcoins under BitGo’s care will be underwritten by XL Group. The product was customized for BitGo specifically, in conjunction with Innovation Insurance Group LLC. Ty Sagalow, who heads the latter group, is formerly the chief underwriting officer and chief innovation officer at insurance giant AIG.
BitGo becomes one of a select few wallet providers offering full coverage on deposits. Various offerings have been previously launched by Coinbase, Elliptic and Circle. Sagalow said that BitGo’s coverage is most suitable in today’s world of Bitcoin. He explained:
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“We have seen early attempts at insurance in the bitcoin market, such as those based on a captive model funded with cash reserves or ‘crime’ policies that solely cover employee theft of cold storage keys. While this was suitable for Bitcoin’s formative years, it does not scale to the requirements of today’s ecosystem.”
BitGo’s coverage includes all forms of theft, including hackings from external attackers, a problem that has yet to subside.
BitGo’s robust multisig solutions have yet to be compromised, and have been employed by Bitstamp, Bitcoin Foundation and others. Thus, the underwriter can afford to offer low premiums, knowing that future claims will likely be a rare occurrence.