Insurers More Comfortable Offering Coverage for Digital Assets to Financial Advisors

Insurance companies are more willing to offer errors and omissions coverage to registered investment advisors (RIAs) who seek protection for claims arising from cryptocurrency investments, as noted by a steep drop in premium costs, according to proprietary data from Golsan Scruggs, the corporate insurance brokerage firm serving the financial services industry. Typically, the best barometer of how insurers view risk, premiums for E&O coverage related to digital asset insurance have dropped by roughly half in just a year. The drop in premium prices is driven by two primary factors. First, insurance companies believe that the regulatory environment is becoming clearer, with greater oversight from both the Securities and Exchange Commission and the Financial Industry Regulatory Authority, which regulate advisors’ use and communications around cryptocurrencies. Second, insurance companies are more comfortable with how these assets are custodied. A third factor is advisors themselves.