Bitcoin Mining Business Insurance

Every bitcoin mining business needs insurance. Knowing which type of insurance you need and the best place to get it is the next step.

This article will cover the main types of business insurance and help you find the best bitcoin mining business insurance.

Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.

Best Insurance for a Bitcoin Mining Business

The most common and comprehensive type of bitcoin mining business insurance is general liability insurance. We recommend general liability insurance as your first line of defense against a variety of the most general and commonly occurring claims.

Some of the risks general liability insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

While a bitcoin mining business isn’t legally required to carry general liability insurance, operating without it is extremely risky. If your bitcoin mining business is sued, you could face fees totaling hundreds of thousands of dollars (or more).

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Cost of General Liability Insurance

On average, bitcoin mining companies in America spend between $350 - $900 per year for $1 million in general liability coverage.

Compare the average cost of general liability insurance for a bitcoin mining business to other professional industries using the graph below:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • Number of employees
  • Per-occurrence limit
  • General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner's policy (BOP) rather than as a standalone policy. A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

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Common Situations That General Liability Insurance May Cover for a Bitcoin Mining Business

Example 1: A repairman is visiting your place of business when he trips over a power cable and breaks her arm. She asks that your business pay for her medical care. You can likely get financial help to pay for her treatment from your general liability policy.

Example 2: One of your competitors files a lawsuit against your business for libel, claiming you caused damage to their company through your latest marketing campaign. A general liability insurance policy you carry will pay for your legal defense when your company is accused of libel. It will also pay for the cost of a settlement if you need to settle out of court.

Example 3: A delivery driver is walking into your building from the parking lot when he slips on some ice and breaks his hip. He decides to sue your business, claiming you should have prevented the ice accumulation or marked it to prevent possible injuries. Your general liability insurance policy will pay for an attorney to defend your business as well as cover the cost of a settlement if one is required.

Check out our review of the Best Small Business Insurance Companies.

Other Types of Coverage Bitcoin Mining Businesses Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all bitcoin mining companies should obtain:

Commercial Property Insurance

The equipment you use to mine bitcoin required a significant investment on your part. If you were to lose that equipment in an event like a fire, you would be forced to replace it before you could get back to mining and bringing in income. With commercial property insurance, as long as your property was damaged by a covered event, you should be able to get help from your insurer to replace it.

In addition to the policies outlined above, there are a few other types of coverage your bitcoin mining company may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.

Workers’ Compensation Insurance

If you have employees, your state probably requires you to carry workers’ compensation insurance. The workers’ comp policy you have will ensure that your employees are protected if they are injured performing job-related duties. For example, if an employee gets carpal tunnel, the workers’ comp policy would pay for his or her medical treatment. It would also help pay for his or her lost wages while recovering.

Additional Steps To Protect Your Business

Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.

Here are several things you can do to better protect your bitcoin mining business:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
  • Stay up to date with business licensing.
  • Maintain your corporate veil.

Business Insurance Is the Best Way to Protect Your Business

If you're starting a new business, then you need business insurance. It's as simple as that. The protection offered by an LLC will protect your personal assets, but your business's assets are still open to liability in the case of a lawsuit or other loss.

Be sure that everything you've built is safe by getting business insurance.

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Bitcoin Mining Business Insurance FAQ

Can I buy business insurance online for my bitcoin mining business?

Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.

What is included in a business owner’s policy?

A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.

What is the difference between business insurance and general liability insurance?

"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.

Do I need insurance before I start a bitcoin mining business?

You should invest in business insurance coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it’s best to be proactive when it comes to protecting your assets. After all, you can’t buy insurance to cover a loss that has already occurred.

Will insurance protect my bitcoin mining business from everything?

Not necessarily. Certain exceptions may be written directly into your bitcoin mining business insurance policy, and some perils may be entirely uninsurable.

Is general liability the same as business owners?

A general liability insurance policy covers only liability losses. A business owner's policy covers both liability and property losses.

How do I choose the best general liability insurance?

The best general liability coverage for your business really depends on the amount of coverage you’re comfortable with and how often you expect to file a claim. A relatively safe business with a very low risk of accident or legal liability could opt for lower premiums with higher deductibles. 

However, if you are in an accident or injury-prone industry or are making advertising claims about the effectiveness of your service or product, you may wish to consider more extensive coverage. We recommend using a digital insurance provider like Next Insurance.

Do I need business insurance if I already have an LLC?

Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.

An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.

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