Businesses operating in digital assets carry risks that standard commercial policies were not drafted for: theft or loss of assets held in custody, technology failure on platforms clients rely on and governance exposure in a fast-moving regulatory environment. This is a specialist class with limited insurer appetite, where custody architecture, controls and governance largely determine whether terms are available at all. Every placement is subject to detailed review.
What is digital asset insurance?
Digital asset insurance is not a single product. It is a programme assembled from specialist markets for businesses with exposure to digital assets, blockchain, crypto-related activity, tokenised assets or custody arrangements. Elements of cover can include custody or specie-style cover for assets held, crime, cyber, professional indemnity and directors’ and officers’ liability, subject to insurer appetite, underwriting, terms, conditions, exclusions and policy wording.
Why it matters
Three different exposures hide inside “digital asset risk” and assuming one policy covers all of them is the most common error in the class. There is cover for your own assets, cover for assets you hold for others and cover for liability arising from the services you provide. Each needs its own instrument. A standard cyber or crime policy typically does not respond to theft of digital assets held in custody, because definitions of covered property matter and most were not written with private keys in mind.
Capacity is not freely available: this is a limited specialist market where governance, controls and audit posture determine whether terms are offered at all, and directors of firms in the sector can struggle to obtain cover without demonstrating governance maturity. For otherwise-conventional businesses that hold digital assets on balance sheet or accept them in payment, whether existing policies respond is a wording question that should be tested, not assumed.
What are the benefits?
- A structured review that separates the three exposures (own assets, custody assets, service liability) so each has a deliberate home.
- Access to the specialist markets that write the class, approached with a submission built to their expectations.
- Coordinated definitions across cyber, crime, custody covers, so asset theft has one clear home rather than falling between wordings.
- Sequencing advice: controls and governance first, then market approach, because premature approaches to a limited market can burn appetite.
- Support for directors’ and officers’ cover in a sector where governance maturity is the gateway to terms.
- A submission discipline that treats disclosure quality as the product, because in this class the technical submission materially affects the terms offered.
What can it cover?
Depending on the business model and insurer appetite, a digital assets programme can include, subject to policy wording:
- Custody or specie-style cover for digital assets held, including loss arising from compromise of private keys, where the wording responds.
- Crime cover for internal and external theft, coordinated with the custody cover.
- Cyber cover as the technology-event backbone: incident response, restoration and liability elements.
- Professional Indemnity for advice and services connected to digital assets.
- Directors’ and Officers’ liability for the governance exposure of the firm’s own board and executives.
- Cover structured around hot wallet and cold storage arrangements as insurers price and restrict very differently. A business’s custody architecture largely determines what is insurable.
What usually isn’t covered?
Exclusions and limitations vary between wordings, and in this class definitions matter more than in almost any other. Commonly, subject to policy wording:
- Loss arising from failure to follow the key management procedures stated to the insurer, including multi-signature arrangements and segregation of duties. Breach of these warranties can void the cover the business thinks it has.
- Unverifiable loss, where the insured cannot evidence the theft or the holdings.
- Market and price movement. A fall in asset value is not an insured loss; only specified perils to the assets are.
- Incidents and circumstances known before inception.
- Insolvency of platforms where client assets sit.
- Class-specific exclusions appearing on some wordings.
How DKG supports you
DKG starts with the company’s corporate structure, business model and the architecture, because in this class they decide what is insurable. We review whether you operate as an exchange, custodian, fund, tokenisation platform, adviser or payments business; your custody arrangements, including hot and cold storage split and key management in general terms; your governance and audit posture; your regulatory position and licences held or applied for; and the types and values of assets held for yourself and for others.
We then deliberately sequence the market approach. Controls and governance come first, then a detailed technical submission built to the expectations of the limited specialist markets that write the class. The quality of a submission and underwriting information materially affect whether terms are offered and on what basis. We coordinate definitions across custody, crime and cyber covers so asset theft has one clear home; structure limits against asset values held, with partial insurance of custody exposure made explicit rather than discovered; and address the directors’ and officers’ conversation alongside the asset covers.
At claim time, asset-loss elements are typically discovery-based and liability elements claims-made, so we help you notify early, evidence holdings and loss properly and manage insurer engagement through to resolution, with the wording and the insurer determining the outcome. As custody arrangements, volumes and the regulatory environment change, we review the programme against them. To review digit asset cover, contact Carien via email or phone on 1800 252 926.
Related services
Cyber Insurance
Professional Indemnity Insurance
Management Liability (including Boardroom Liability) Insurance
Financial and Professional Liability Insurance
Important note− The information provided is general advice only and has been prepared without taking into account your objectives, financial situation or needs. When making decisions about digital asset insurance, please consider the Product Disclosure Statement.
In digital assets, the market underwrites and quotes a business and the total sum of all the sets of controls. Custody architecture, key management and governance decide whether terms are quoted, so our work starts well before the submission. The other error I see is treating this as one exposure. Your own assets, assets you hold for others and liability for what you do are three different risks and each needs its own instrument.
DKG Insurance Brokers
Why Choose DKG Insurance Brokers?
Please reach out to Carien Ahdar via email or call on 1800 252 926 to learn more about how we can tailor digital asset insurance solutions to support your operational, regulatory and risk management requirements.
Choosing DKG Insurance Brokers means partnering with a brokerage that understands the evolving risk landscape facing Australian digital asset businesses. Our team works with exchanges, custodians, asset managers, tokenisation platforms and other participants within the digital asset sector to structure insurance solutions aligned to the way these businesses operate.
We work closely with specialist insurers, including Lloyd’s markets and other A-rated underwriters, to help clients navigate complex exposures including custody risk, cyber threats, crime, professional liability and regulatory scrutiny.
As ASIC expectations and AFSL obligations continue to develop, businesses operating in the digital asset sector require insurance that is both commercially practical and fit for purpose. Our approach focuses on identifying potential coverage gaps, negotiating appropriate policy terms and ensuring insurance programs are aligned to operational realities and compliance expectations.
Whether you are establishing a new venture, applying for an AFSL or reviewing an existing insurance program, DKG Insurance Brokers can help structure cover that reflects the unique risks of the digital asset sector.
In digital assets, the market underwrites and quotes a business and the total sum of all the sets of controls. Custody architecture, key management and governance decide whether terms are quoted, so our work starts well before the submission. The other error I see is treating this as one exposure. Your own assets, assets you hold for others and liability for what you do are three different risks and each needs its own instrument.
DKG Insurance Brokers