Old Mutual Insure has issued a statement regarding the insurance of PC hardware, stating that it will not insure any computer equipment used to mine cryptocurrency.
The company said that mining digital currencies usually requires expensive hardware, and said it has opted out of insuring this equipment due to the unregulated nature of the industry and its association with cybercrime.
Old Mutual Insure also cited the 24/7 workloads and intense strain placed on this hardware as reason it would no longer insure mining equipment.
“We have chosen not to provide cover for this type of risk as it is quite tricky to conduct a proper risk analysis of an unregulated fledgling industry that is already on the radar of financial authorities due to the unfortunate association with money laundering and cybercrime,” said Old Mutual insurance expert Christelle Colman.
“It is also a highly volatile industry that attracts a lot of speculators so there is no proper risk rating structure in the local market for this type of risk,” Colman said.
“Even doing a comprehensive inventory of the insured equipment is difficult because the value of the highly modified computer equipment is typically inflated and almost impossible to verify as it is usually imported from obscure suppliers in the Far East.”
Old Mutual said it is currently conducting an in-depth review of all clients to ensure that they are not involved in cryptocurrency mining.