CNA Financial, the seventh-largest commercial insurer in the United States, has excluded $20 million worth of nonfungible tokens (NFTs) coverage from Schwab Strategic Trust’s policy. An attachment from the insurer specified an exclusion saying that any losses, damage, claim, occurrence, or lawsuit related to NFTs will not be covered by the policy.
The insurer also attached an exclusion to the documents he filed. It was submitted to the U.S. Securities and Exchange Commission, mentioning that the bond does not cover any “loss, damage, claim, occurrence, or suit related to NFTs.” The filing defined NFTs as:
“Any unique digital identifier 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.”
Any losses related to NFTs, will not be covered by the insurer, with the section attached to the policy. However, the document also clarifies that “cryptocurrency” is not included in its definition of NFTs.
In the bull market of 2021, NFTs gained popularity, with various celebrities and companies jumping on the trend. However, in the last few months, their prices and trading volume have experienced a steep decline. On August 3, NFTs experienced a drop in gas usage, signaling a shift in the landscape. Despite the drop in interest in NFTs, some celebrities and businesses continue to dive in.
On the 4th of September, football star Cristiano Ronaldo announced plans to release more NFTs while undergoing a lie detector test. Ronaldo did the lie detector test to celebrate the launch of his second NFT collection with crypto exchange Binance. Besides Ronaldo, an airline company recently implemented NFTs into its loyalty program.
Lufthansa launched an NFT app On August 31, allowing users to scan their boarding passes to redeem NFTs. Once collected, the NFTs can make passengers eligible for rewards, such as flight upgrades or lounge access.
