The bitcoin insurance policy I want from an exchange is where they insure me against loss due to actions taken by the exchange and underwritten by a major underwriter, and not the exchange itself. Only then would I really believe that the exchange meant to protect my bitcoins fully, because they've essentially put themselves on the hook for the damages (by having to bear the cost of the insurance policy, recouped by some kind of holding fee or transaction fee).<p>The exchange having insurance does relatively little to protect me against loss, even if it's a smart business move on their part to limit their losses to creditors in the event of a theft of inventory. That's only sane business, and it's a little crazy how long it took that to become normal in bitcoin.<p>It seems (naively) reasonable that the exchange could float something like 10k-20k policies of some mixture of 0.1btc, 0.5btc, and 1btc protection, depending on the level of activity in an account, and require that anyone holding more bitcoin than that in their trading account take out a separate policy for that amount or else acknowledge that they're only protected up to 1btc. (An additional corporate policy against theft of inventory seems reasonable, and likely would lower the rate on these separate policies, since the underwriter would know you could cover some degree of loss already, through that policy.)<p>Edit:<p>Thinking about the numbers, it would only be ~$20 million of coverage to cover 50,000 customers (40,000 at 0.5btc and 10,000 at 1btc). This seems reasonable.