- CNA Financial excludes NFT coverage in a $20 million policy with Schwab Strategic Trust.
- The insurance filing specifies that losses related to NFTs will not be covered, while distinguishing them from cryptocurrencies.
- NFTs gained immense popularity in 2021 but have since seen a decline in prices and trading volume.
CNA Financial, the seventh-largest commercial insurer in the United States, has taken a firm stance on non fungible tokens (NFTs) by excluding them from coverage within Schwab Strategic Trust’s substantial $20 million policy. This move, outlined in a filing submitted to the U.S. Securities and Exchange Commission, underscores the insurer’s cautious approach to the volatile world of digital assets.
In this comprehensive filing, CNA Financial explicitly states that the policy does not extend to encompass any “loss, damage, claim, occurrence, or suit related to NFTs.” The definition provided in the document describes NFTs as “unique digital identifiers connected to any digital ledger technology, which may be used to certify authenticity or ownership of anything, including but not limited to any digital, tangible, or intangible item, but cannot be substituted or exchanged for any similar item.”
With this exclusion firmly in place, the insurer makes it clear that losses tied to NFTs will not be covered. However, it’s important to note that the document also makes a distinction between NFTs and “cryptocurrency,” which is not included in the NFTs’ definition. This nuance reveals the insurer’s strategic approach to differentiating between various digital assets.
NFTs experienced a meteoric rise in popularity during the bull market of 2021, attracting the attention of celebrities and corporations alike. However, the landscape has shifted since then, with NFT prices and trading volumes experiencing a sharp decline. Notably, on August 3rd, NFTs exhibited a decrease in gas usage, indicating a notable change in the market dynamics.
Despite the waning interest in NFTs, some high-profile figures and businesses continue to explore this space. For instance, soccer superstar Cristiano Ronaldo announced on September 4th that he intends to release more NFTs in the future. This revelation came during a unique lie detector test, conducted to celebrate the launch of his second NFT collection in collaboration with crypto exchange Binance.
In addition to individual celebrities, corporate entities are also integrating NFTs into their operations. On August 31st, Lufthansa, the renowned airline, unveiled an NFT app as part of its loyalty program. This innovative app allows users to scan their boarding passes to redeem NFTs, which can, in turn, qualify passengers for enticing rewards, such as flight upgrades and access to airport lounges.
CNA Financial’s exclusion of NFT coverage in the Schwab Strategic Trust’s policy highlights the cautious approach taken by insurers toward digital assets. While NFTs once rode a wave of hype and popularity, their fluctuating market dynamics have prompted institutions to carefully evaluate their coverage strategies, ensuring that they align with the evolving landscape of digital assets.