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DEX Insurance

The shift from centralized exchange to decentralized exchange (DEX) was a quick one. However, the DEX market is still quite volatile, with the ever-changing regulations adding layers of complexity for DEX businesses. Therefore, ensuring that you’re well-protected in every way is paramount.

Founder Shield is more than just an insurance company — we are your trusted partners in navigating the intricacies of the decentralized exchange industry, providing tailored solutions to protect your investments and ensure peace of mind.

DEX Industry Overview

The decentralized exchange (DEX) industry has witnessed unprecedented growth, driven by the surge in popularity of self-executing smart contracts and blockchain technology. As of 2024, the decentralized exchange market is expected to boast an impressive revenue of $26,170 million. Statista reveals that the user penetration rate of 0.24% in 2024 is expected to increase to 0.28% by 2028.

This rapid expansion from centralized exchanges to DEX has led to an influx of liquidity providers with more liquidity pools available for investors, trading fees, and innovative DeFi insurance protocols, revolutionizing how transactions are conducted on blockchain networks.

Why Is Insurance for
DEX Companies Important?

Decentralized Exchange Insurance,  can leverage insurance to be protected against several risks, improve the efficiency of their business processes, and position themselves as credible within the industry.

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Protects Against Smart Contract Risks

Smart contracts lie at the heart of decentralized exchanges, automating transactions without the need for a central authority. However, vulnerabilities and exploitable bugs pose significant risks. Founder Shield safeguards your assets against smart contract failures, ensuring a secure trading environment.

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Defends Against Impermanent Loss

Decentralized platforms expose users to impermanent loss, a unique risk stemming from liquidity pool participation. Founder Shield’s insurance covers impermanent loss, shielding your investments from potential financial setbacks in the rapidly evolving DeFi ecosystem.

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Safeguards Private Keys and User Assets

Decentralized exchanges grant users control over their private keys, empowering them with greater security. Founder Shield’s insurance extends beyond transactions, protecting your private keys and assets from potential breaches and unauthorized access.

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Mitigates Risks in Peer-to-Peer Transactions

Engaging in peer-to-peer transactions introduces inherent risks. Founder Shield’s decentralized exchange insurance mitigates these risks, offering compensation and coverage against fraudulent activities, ensuring a secure and trustworthy trading experience.

DEX Insurance
Coverage & Policies

These coverages form the foundation of any risk management program for Decentralized exchanges:

general liability
General Liability Insurance Learn More
General Liability Insurance

General Liability Insurance covers claims of bodily injury, property damage, and personal and advertising injury that could occur during business operations. For DEX companies, this insurance is crucial as it provides protection against claims that might arise from any direct physical interactions, such as during meetings or events. It also covers liabilities related to advertising, which is vital for any company engaged in promotional activities.

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Workers’ Compensation Learn More
Workers’ Compensation

Workers’ Compensation Insurance covers medical expenses and a portion of lost wages for employees who suffer work-related injuries or illnesses. Despite DEX companies primarily operating online, they may have employees in various roles, including IT, customer service, or marketing, who could face workplace injuries. This insurance ensures compliance with legal requirements and provides support for employees, essential for maintaining a stable workforce.

Employment practices liability (EPL) Learn More
Employment practices liability (EPL)

EPL Insurance protects against claims from employees alleging discrimination, wrongful termination, harassment, and other employment-related issues. DEX companies, operating in a fast-paced and often high-pressure environment, can benefit from this coverage as it offers protection against the legal and financial consequences of these claims, ensuring smoother human resource management.

DEX Specific
Insurance Coverage

These policies are essential for or can be tailored to the needs of companies operating in DEX :

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Directors and Officers Learn More
Directors and Officers

D&O Insurance covers personal liabilities that directors and officers may face for decisions and actions taken in their corporate roles. For DEX companies, where decisions can significantly impact the financial and operational aspects, D&O insurance is essential. It provides a safety net for personal assets against lawsuits, which is crucial for attracting and retaining top talent in leadership positions.

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Errors and Omissions Learn More
Errors and Omissions

E&O Insurance, also known as Professional Liability Insurance, covers legal fees and damages for lawsuits alleging inadequate or negligent professional services. For DEX companies, which facilitate complex financial transactions, this insurance is vital. It protects against claims of errors, omissions, or negligence in their services, safeguarding the company’s financial health and reputation.

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Cyber liability Learn More
Cyber liability

Cyber Liability Insurance is designed to cover a business’s liability in the event of a data breach or cyber attack. Given that DEX companies operate online and deal with sensitive financial data and digital assets, they are at high risk of cyber threats. This insurance covers costs related to data breaches, including legal fees, notification costs, and recovery measures, making it an indispensable part of risk management for DEX companies.


Crime Insurance covers losses due to criminal acts such as theft, fraud, and forgery. In the context of DEX companies, where digital asset transactions are central, the risk of internal and external crimes is significant. This policy provides financial protection against such criminal activities, ensuring the security of the company’s assets and operations.

DEX Insurance Costs

Decentralized exchange insurance costs vary based on factors such as transaction volume, the complexity of smart contracts, and the types of risks covered. With Founder Shield as your insurer, you can expect complete transparency, customized policies tailored to your specific needs, and top-notch service at all times. As the decentralized exchange industry expands, our flexible pricing ensures that you receive optimal coverage without compromising your budget.

DEX Insurance Frequently Asked
Questions (FAQ)

The cost of insurance for Decentralized Exchange (DEX) businesses varies widely depending on factors such as the size of the business, the volume of transactions handled, the types of assets exchanged, and the specific risks associated with their operations. Given the inherent risks in handling digital assets and the relatively new market of DEXs, insurance premiums can be higher than traditional finance sectors. Costs can range significantly, with smaller exchanges possibly paying a few thousand dollars annually, while larger ones could see much higher premiums, especially for comprehensive policies like cyber liability and errors & omissions insurance.

While there are no specific regulations mandating insurance for DEX businesses, given the nature of their operations, having insurance is highly recommended. The digital asset industry is subject to various risks including cyber attacks, technical failures, and regulatory changes. Insurance such as cyber liability, errors & omissions, and directors & officers can provide essential protection against these risks. In some jurisdictions, certain types of insurance like workers’ compensation might be legally required depending on the business structure and number of employees.

The amount of insurance a DEX business needs depends on multiple factors, including the scope and scale of its operations, the types and volumes of transactions processed, and its exposure to various risks such as cyber threats, operational liabilities, and potential legal challenges. A thorough risk assessment, ideally conducted with an insurance provider knowledgeable about the crypto and DEX industry, is crucial to determine the appropriate level of coverage. This assessment should cover potential financial impacts of various risk scenarios, ensuring that the business is adequately protected.

To obtain insurance for a DEX business, it’s advisable to approach insurers or brokers that specialize in cryptocurrency and digital asset businesses. They will have a better understanding of the unique needs and risks associated with DEX operations. Provide detailed information about your business, including the types of transactions handled, security measures, compliance protocols, and any risk management strategies in place. This will help insurers tailor a policy that fits your specific needs.

Business liability insurance is a broad term that covers various types of insurance policies designed to protect a business against liabilities arising from its operations. This typically includes general liability insurance, which covers claims of bodily injury, property damage, and personal injury, as well as professional liability insurance (errors & omissions), which protects against claims of professional negligence or inadequate services. For DEX businesses, this type of insurance is crucial as it covers a range of potential risks from operational activities and professional services.


Yes, DEX insurance policies can often be customized to suit the specific needs of the business. Given the unique and varied nature of DEX operations, it’s important to work with an insurance provider that understands the crypto market and can offer tailored coverage. This could include adjusting coverage limits, deductibles, and including specific endorsements or exclusions that align with the particular risks and operations of your DEX business. Customization ensures that the policy provides adequate and relevant protection.

DEX Insurance Quotes

Finding DEX insurance coverage doesn’t have to be painful. We aim to make the purchasing experience as streamlined and intuitive as possible.

Get a quote

Use our custom-built digital platform to get quotes fast. We automate clerical tasks that plague traditional insurance brokerages, giving us more time to be responsive and alert to your company’s needs.

Pair with a specialist

No two organizations are the same. Our team of coverage experts partners with your team to engineer your risk management strategy, together. We take the time to understand the intricacies of your company to get you the best possible coverage.

Stay one step ahead

To do better, you need to know better. With changing political, technological, legal, and economic landscapes, staying ahead of the curve is critical.

Our in-house team is tapped into the latest developments in your industry, proactively ensuring you’re covered.

Wil Hamory Vice President
Wil Hamory, Executive VP and Financial Industry Lead

Your DEX Insurance Specialist

Wil isn’t your average insurance guy. He thrives in the dynamic world of cyber risks, keeping pace with Founder Shield’s innovative clients.  His mission? Tailoring cutting-edge risk solutions to propel their growth. Wil’s a cyber security veteran, having witnessed the evolution of threats firsthand.  He’s helped countless Fintech, Healthtech, and Crypto companies navigate legal hurdles and scale their businesses securely.  Before joining Founder Shield, Wil honed his skills underwriting cyber liability for large private and public entities at Zurich. A University of Delaware grad, Wil has dedicated his career to empowering clients to conquer cyber threats and stay ahead of the curve. 

Why Choose Founder Shield?

Founder Shield is a leading insurance provider that specializes in offering comprehensive coverage for DEX companies, offering numerous benefits and advantages over traditional insurance providers. Here’s a breakdown of some of the key features and benefits that you’ll enjoy with us:

Benefits of Choosing Founder Shield:
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Industry Expertise

Founder Shield is focused on protecting rapidly evolving startups. We ensure that our products are tailored to meet the unique needs of Web3 businesses.

Customized Solutions

Founder Shield offers bespoke insurance policies that are designed specifically for each client’s needs, ensuring comprehensive coverage that addresses the unique risks associated with digital asset operations.

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Fast Quotes

With Founder Shield’s streamlined quoting process, you can receive a personalized quote for your insurance quickly, allowing you to make informed decisions quickly.

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Ease of Use

Founder Shield’s user-friendly digital platform makes it easy to manage your insurance policies, submit claims, and access important documents whenever you need them.

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Dedicated Support

Founder Shield provides exceptional customer service, with dedicated account managers who are always available to assist you with any questions or concerns you may have about your insurance coverage.

Scalable Coverage

As your business grows, Founder Shield’s insurance policies can grow with you, ensuring you always have the right level of coverage for your changing needs.

Founder Shield is a preferred choice for Web3 businesses because of our specialization in the industry. We offer flexible and customized insurance policies, a speedy quoting process, and exceptional customer service with dedicated account managers.