Insurance broker and risk advisor Marsh has launched an insurance facility targeting custodians of digital assets including financial institutions.
The facility, claimed to be the largest of its type, offers an insurance capacity of up to $825m and is accessible to Marsh clients across the globe.
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Marsh’s newly unveiled facility is designed to support organisations that store digital assets offline, commonly referred to as ‘cold storage’.
It also caters to those seeking to insure certain risks associated with assets secured by multi-party computation (MPC) or other custody solutions that are not fully offline.
Backed by Lloyd’s syndicates and London-based international insurers, the facility aims to protect organisations’ digital assets from risks such as physical natural perils, third-party physical theft and internal collusion by employees tasked with secure storage.
The launch comes as industries worldwide are positioning themselves as players in digital asset custody following a decade of considerable growth in the digital asset market.
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By GlobalDataMarsh’s Global Technology Industry Risk Study 2023 revealed that half of respondents from the global technology sector are currently involved with or exploring digital asset opportunities.
Additionally, 136 US banks under the Federal Deposit Insurance Corporation are either planning or already participating in initiatives related to digital currencies, the insurance broker noted.
Marsh Specialty’s Digital Asset team in New York and London, which provides risk transfer solutions to companies operating with blockchain, cryptocurrency and digital assets, developed the facility.
Marsh Specialty global digital asset leader Jacqueline Quintal said: “We anticipate continued focus on and activity in the global digital assets space, as organisations navigate the complex risk environment and interconnected, expanding ecosystem of stakeholders.
“Marsh’s facility provides custodians with protection for the key operational risks they face in the management of digital assets; we look forward to supporting clients globally in aligning their risk financing and evolving commercial strategies, as they focus on building their operational resilience and market presence in this fast-growing sector.”
In a separate development this week, Marsh established Edgware Re, a cyber-only captive insurance company based in Bermuda.
