# Insurance `kaal:entity:insurance` **Status.** derived This node is assembled mechanically from the 15 claims that carry the concept tag `insurance`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself. ## Every claim under this term 15 claims across 8 works, 2019 to 2025. **2019** - [3406323-025](https://wulfkaal.github.io/claims/3406323-025) [condition/argued] -- Without something that functions as an insurance policy when commercial risks materialize, the public has no reason to pursue the benefits of decentralized commerce, so decentralized underwriting is of core importance to any future decentralized technology solution. > Without someone or something that functions as an insurance policy should risks in commerce materialize, the public has no reason to try to benefit from the potential benefits of decentralized commerce Wulf A. Kaal, Decentralization - A Primer on the New Economy (2019). SSRN: https://ssrn.com/abstract=3406323 - [3406323-026](https://wulfkaal.github.io/claims/3406323-026) [failure/argued] *(failure mode)* -- Legacy insurers will not underwrite smart contracts that sit outside the traditional legal framework, and even if they eventually enter the DApp market their actuarial risk assessment methods may be only partially compatible with rapidly evolving decentralized products. > Most legacy insurance companies will not consider underwriting a smart contract that is not subject to the traditional legal framework. Wulf A. Kaal, Decentralization - A Primer on the New Economy (2019). SSRN: https://ssrn.com/abstract=3406323 - [3411897-029](https://wulfkaal.github.io/claims/3411897-029) [condition/argued] -- Decentralized underwriting is a necessary precondition for decentralized commerce: without something functioning as an insurance policy when commercial risks materialize, the public has no reason to pursue the benefits of decentralized commerce. > Without someone or something that functions as an insurance policy should risks in commerce materialize, the public has no reason to try to benefit from the potential benefits of decentralized commerce, Wulf A. Kaal, Decentralization - Past, Present, and Future (2019). SSRN: https://ssrn.com/abstract=3411897 - [3411897-030](https://wulfkaal.github.io/claims/3411897-030) [failure/asserted] *(failure mode)* -- Most legacy insurance companies will not consider underwriting a smart contract that is not subject to the traditional legal framework, which leaves sophisticated smart contracts without the insurance they require. > Most sophisticated smart contracts will require a form of insurance/underwriting to offset the risks of possible failure. Most legacy insurance companies will not consider underwriting a smart contract that is not subject to the traditional legal framework. Wulf A. Kaal, Decentralization - Past, Present, and Future (2019). SSRN: https://ssrn.com/abstract=3411897 - [3411897-031](https://wulfkaal.github.io/claims/3411897-031) [failure/argued] *(failure mode)* -- Even if legacy insurers do enter the DApp market, their products may not fit the need, because actuarial methods for risk assessment under traditional insurance metrics are only partially compatible with rapidly evolving decentralized products. > Actuarial methods for risk assessment under traditional insurance metrics may be only partially compatible with rapidly evolving decentralized products. Wulf A. Kaal, Decentralization - Past, Present, and Future (2019). SSRN: https://ssrn.com/abstract=3411897 **2021** - [3782205-033](https://wulfkaal.github.io/claims/3782205-033) [mechanism/argued] -- Every type of economic action becomes more efficient when decisions are hedged, because hedging lets participants confidently change investments and keeps the market liquid, and lending and insurance therefore require someone to underwrite the risk. > Every type of economic action is made more efficient when decisions are hedged, so we can confidently change our investments, keeping the market liquid. Lending and insurance are essential catalysts for business, that require someone to underwrite the risk. Craig Calcaterra, Wulf A. Kaal, Eight Institutions for the Evolution of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782205 - [3782216-008](https://wulfkaal.github.io/claims/3782216-008) [failure/argued] *(failure mode)* -- Liquidity has always been a problem on decentralized exchanges because meaningful history and reputation cannot form where there is little or no governance structure, no insurance, no appeals process and no reputable decentralized news service. > But liquidity has always been a problem in decentralized exchanges, as meaning- ful history and reputation are difficult to achieve when there is little to no governance structure, no insurance, no appeals process, and no reputable decentralized news ser- vice Craig Calcaterra, Wulf A. Kaal, Decentralized Finance (DeFi) (2021). SSRN: https://ssrn.com/abstract=3782216 - [3782220-012](https://wulfkaal.github.io/claims/3782220-012) [failure/argued] *(failure mode)* -- Automating insurance away with smart contracts risks a race to the bottom, because foregoing insurance is more efficient in the short term for an individual, yet the resulting rare unprotected tragedies can chill the entire system. > we must avoid a race to the bottom. It's more efficient in the short term for an individual to forego any insurance, so some will outcompete others if they are lucky enough to avoid rare tragedies. But the rare unprotected tragedies can chill the entire system. Craig Calcaterra, Wulf A. Kaal, The Importance of Transcendental Unifying Values for Decentralization (2021). SSRN: https://ssrn.com/abstract=3782220 - [3782220-014](https://wulfkaal.github.io/claims/3782220-014) [mechanism/argued] -- Overhead institutions such as insurance and policing act as catalysts supplying the activation energy that guarantees liquidity in both government and private business. > Overhead institutions, like insurance or policing, provide the catalyst activation energy to guarantee liquidity in business—both government and private. Craig Calcaterra, Wulf A. Kaal, The Importance of Transcendental Unifying Values for Decentralization (2021). SSRN: https://ssrn.com/abstract=3782220 - [3782220-017](https://wulfkaal.github.io/claims/3782220-017) [mechanism/argued] -- Demand for insurance and reputation policing runs counter to prosperity: when the system runs well and everyone profits there is less need for insurance, and when profits fall and competition intensifies cheating becomes more attractive and more policing is needed. > If the system is running well and everyone is profiting, there is less need for insurance. When the profits decrease and the system becomes more competitive, cheating becomes more attractive, and more insurance and reputation policing is needed. Craig Calcaterra, Wulf A. Kaal, The Importance of Transcendental Unifying Values for Decentralization (2021). SSRN: https://ssrn.com/abstract=3782220 - [3936876-033](https://wulfkaal.github.io/claims/3936876-033) [empirical/evidenced] *(failure mode)* -- Insurance coverage among digital asset service providers is far from universal: 46 percent of surveyed service providers reported not being insured against any risks. > 46% of service providers surveyed as discussed above reported not being insured against any risks. Wulf A. Kaal, Hayley Howe, Custody of Digital Assets (2021). SSRN: https://ssrn.com/abstract=3936876 - [3995709-024](https://wulfkaal.github.io/claims/3995709-024) [failure/asserted] *(failure mode)* -- Despite the significant flaws in code reviews and their often flawed results, the existing code review market does not allow for any form of insurance product of the kind associated with products in other markets. > Despite the significant flaws in the code review process and the associated often flawed results of code reviews, the existing code review market does not allow for any form of insurance products that are associated with other products in other markets. Wulf A. Kaal, How DAOs Optimize Open-Source Code Reviews and Create Open-Source Standards (2021). SSRN: https://ssrn.com/abstract=3995709 - [3995709-037](https://wulfkaal.github.io/claims/3995709-037) [design/asserted] -- In future iterations the CRDAO will offer the customer a form of insurance where the code review does not correspond with the contractual obligations of the parties. > In future iterations, the CRDAO offers the customer a form of insurance if the code review does not correspond with the contractual obligations of the parties. Wulf A. Kaal, How DAOs Optimize Open-Source Code Reviews and Create Open-Source Standards (2021). SSRN: https://ssrn.com/abstract=3995709 - [3995709-038](https://wulfkaal.github.io/claims/3995709-038) [design/asserted] -- CRDAO code review insurance is funded from the CRDAO Code Review Pool, which consists of the assets raised during the CRDAO token offering plus ten percent of any incoming code review job revenue. > The insurance will be paid from the CRDAO Code Review Pool (CRP) which consists of the assets raised during the CRDAO token offering as well as 10% of any incoming code review job revenue. Wulf A. Kaal, How DAOs Optimize Open-Source Code Reviews and Create Open-Source Standards (2021). SSRN: https://ssrn.com/abstract=3995709 **2025** - [5583610-036](https://wulfkaal.github.io/claims/5583610-036) [failure/evidenced] *(failure mode)* -- Smart contract exploits are a live failure channel for LER, capable of producing losses on the scale of DeFi incidents that have exceeded $1 billion annually and requiring insurance premiums of one to two percent of asset value. > Vulnerabilities such as smart contract exploits could result in losses akin to DeFi incidents, where failures have exceeded $1 billion annually, necessitating insurance premiums of 1–2% of asset value. Wulf A. Kaal, Liquid Equity Rewards in Corporate America (2025). SSRN: https://ssrn.com/abstract=5583610 ## Verify Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust. curl -s https://wulfkaal.github.io/entities/insurance.md | sha256sum **Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.