Evertas is one of the very few cryptocurrency insurers that work with Lloyd’s of London. They have acquired Bitsure for an undisclosed sum. Bitsure was a specialist insure of Bitcoin mining operations.

Thomas Shewchuck, co-founder of Bitsure and its president, joins Evertas in the role of head of underwriting.

In recent years, crypto companies have struggled to find insurance products as underwriters & issuers are still trying to understand the unique features of digital assets.

Evertas has been able to offer mining insurance policies up to 200 million dollars per location, bucking the trend. Bitsure had previously been able to write policies up to $5 million. In December, Compass Mining, a bitcoin hosting and mining company, announced that it had developed a 75m insurance policy.

Evertas CEO J. Gdanski said that providing insurance for the equipment used to mine Bitcoin might appear similar to providing property-risk coverage for data centers. Gdanski says that a lack of understanding of the risk is due to a combination of a general lingering concern about crypto, as well as several factors affecting the value of mining equipment.

Gdanski said to CoinDesk that “of all the crypto-risks, this is the one most familiar to the traditional insurance market.” The pricing of mining equipment is still very variable because its replacement value depends on the value the asset being mined. This presents unique and novel issues, which is why other insurers find it difficult to adapt.

Shewchuck said that the value of crypto-mining equipment is affected by the mining difficulty.

In an interview, he stated that “as the bear-market continues and we move into the halving,” margins for miners continue to be crushed. When it is not profitable to mine, people shut down their rigs and sell them to larger players at a discounted price. It means that more equipment is concentrated in fewer places, increasing the risk.

Bitcoin Halving is Coming: Only the Most Efficient miners Will Survive

Sheldon Reback is the editor.