The Emerging Crypto Insurance Market: Expanding Horizons For Reps & Warranties Coverage

As the digital asset industry matures, the need for reliable insurance solutions has become more urgent. Historically, crypto companies have struggled to secure coverage for losses related to theft, hacking, or regulatory enforcement. In addition, specialty lines such as Reps & Warranties insurance have been hesitant to insure crypto-related transactions. In the past few years, more insurers and brokers have entered the space, and coverage options are gradually expanding to meet demand.

A Market on the Rise

Industry projections suggest that blockchain-based insurance is set for major growth over the next decade. According to Yahoo Finance, the global blockchain-in-insurance market could reach USD 82.56 billion by 2033, reflecting the broader adoption of distributed ledger technology across risk management and claims processing.¹

Although these figures encompass more than just crypto-asset coverage, they reflect the same underlying trend: increasing willingness among insurers to underwrite technology-driven risks and explore blockchain-enabled policy solutions. From a baseline of about USD 3 billion in 2025, the blockchain-insurance sector could grow at a compound annual rate above 50 percent.¹

At the same time, Reps & Warranties insurers are slowly warming up as well. More and more insurers are willing to look at crypto-related transactions to see how they align with their underwriting guidelines or binding authority, instead of just outright refusing any involvement. We are seeing more covered transactions.

Why Insurers Are Entering the Market

Insurers are showing renewed interest in crypto coverage as adoption rises globally. Industry reports confirm more insurance carriers are seeking to capitalize on crypto's mainstream growth.² Several factors explain this trend:

• Growing customer demand: As more investors, exchanges, and custodians enter the market, the expectation of professional-grade risk protection has increased.
• Emergence of specialized providers: Niche underwriters and MGAs (managing general agents) now focus exclusively on digital asset risks, offering tailored policies.
• Partnership models: Some traditional insurers are collaborating with crypto-native partners to share underwriting expertise and technical risk analysis.
• Selective underwriting: Coverage remains limited to companies demonstrating strong governance, transparency, and operational controls.

From the broker perspective, coverage options for directors and officers (D&O), errors and omissions (E&O), and cyber liability are becoming more accessible, particularly for crypto firms preparing for public listings or institutional investment.³ Privately held companies still face exclusions or limited capacity, but the overall direction of the market is positive.

Ongoing Challenges

Despite growth, the crypto insurance sector remains small compared to traditional financial lines. Several challenges continue to limit broader participation:

• Regulatory uncertainty: Inconsistent global treatment of crypto assets complicates underwriting and claims interpretation.³
• Lack of data: With limited historical loss data, insurers struggle to price policies accurately or model exposure.²
• Technical and custody risk: Policies must account for how assets are stored (hot vs. cold wallets), key management systems, and smart-contract vulnerabilities.²
• Market volatility: Fluctuating asset values and token failures make risk forecasting difficult.

These barriers explain why many large insurers remain cautious and capacity is still constrained. However, as risk management standards improve and regulatory guidance becomes clearer, confidence in underwriting digital asset exposures is expected to increase.

These are also the reasons why Reps & Warranties insurance policies involving crypto targets still include broad exclusions. However, in our experience insurers are open to discussions and there is a clear trend towards broader coverage.

What to Expect Next

In the near term, the market will likely evolve through incremental improvements rather than sweeping change. Expect to see:

• Broader adaptation of traditional insurance lines (crime, cyber, and professional liability) to fit crypto-specific risks.
• Increased use of parametric or smart-contract triggers, allowing faster and more transparent claims processes.
• Gradual entry of larger insurers as smaller players demonstrate stable performance and claims experience.
• Clearer regulatory frameworks for stablecoins and custody, which will help standardize coverage terms.³

While still early in development, crypto insurance is moving from niche to necessity. The combination of stronger governance, maturing regulation, and cautious insurer participation signals a slow but steady path toward a more resilient and insurable digital-asset ecosystem.

Footnotes

1 Yahoo Finance. (2025, Sept 25). Blockchain Insurance Market Set to Reach $82.56 Billion by 2033. https://finance.yahoo.com/news/blockchain-insurance-market-set-reach-133000301.html

2 Relm Insurance. (2025). Insurers Look to Capitalise on Rise in Cryptocurrency Adoption. https://relminsurance.com/insurers-look-to-capitalise-on-rise-in-cryptocurrency-adoption/

3 Woodruff Sawyer. (2025). Insurance for Crypto Companies. https://woodruffsawyer.com/insights/insurance-crypto-companies

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