Patrick Bracher
A court in Ohio found that bitcoin is covered ‘property’ under a homeowner’s policy and not ‘money’ and therefore the claim for lost bitcoin was not limited by the money sublimit.
The decision was based partly on a recent Internal Revenue Service document that categorised virtual currency such as bitcoin as property for federal tax purposes.
The ruling enabled the policyholder to claim $16 000 for stolen bitcoin rather than the money sublimit of $200.
A decision on this issue in South Africa will depend on how bitcoin is seen in relation to currency by the authorities. In the meantime, insurers should consider sub-limiting bitcoin claims in the same way they sub-limit money claims.
The case is Kimmelman v Wayne Insurance Group.
First published by: Financial Institutions Legal Snapshot
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