I was hired as the artist for a “PFP” (Profile Picture) project. I designed the 10,000 characters. The developers sold them for $2M and then vanished. Now, the token holders are suing everyone involved—including me—for securities fraud and “aiding and abetting a rug pull.” I just drew the monkeys; I didn’t touch the money.
Key Takeaways
- The “Securities Exclusion”: Most E&O policies exclude claims related to “investments,” “securities,” or “financial advice.” If the court deems the NFT a security, you might be uncovered.
- Scope of Work: Can you prove you were just the illustrator? If you promoted the project on Twitter (“WAGMI!”, “To the moon!”), you became a promoter, increasing your liability.
- Crypto is High Risk: In 2026, many standard carriers (Hartford, Travelers) have blanket exclusions for “cryptocurrency and blockchain related activities.”
- Defense is key: You likely didn’t commit fraud, but you need $50,000 to prove that.
The “Why”: The Speculative Asset Trap
The Trap: Insurance covers professional services (design). It does not cover “Investment Schemes.”
If the lawsuit alleges you were a partner in a fraudulent financial scheme, the insurer will look for the “Racketeering” (RICO) or “Securities” exclusion.
You need a specialty policy from a “Surplus Lines” carrier that specifically writes “Digital Asset” coverage.
The Investigation: I Quoted 3 Major Carriers
1. Relm Insurance
- My Analysis: Relm is one of the few carriers dedicated to Web3. They write policies for NFT artists and projects. They understand the difference between a dev and an artist. They are your best bet.
2. Lloyd’s of London (Syndicates)
- My Analysis: You have to go through a broker to access Lloyd’s. They can write custom policies for “Digital Creators” that cover NFT liabilities, but the premiums are high ($5k+).
3. Standard Carriers (Hiscox/BiBERK)
- My Analysis: I checked their 2026 guidelines. Most still have a hard “No” on anything involving Smart Contracts or Token generation.
[IMAGE: Screenshot of a policy exclusion list showing “Virtual Currency”]
Comparison Table: NFT Liability
| Carrier | Covers NFT/Crypto? | Minimum Premium | Best For… |
| Relm | Yes (Specialty) | | Web3 Creators |
| Lloyd’s | Yes (Custom) | | Big Projects |
| Standard | No | $ | Traditional Design |
Step-by-Step Action Plan
- Gather Evidence of Role: Collect all contracts showing you were hired as a “Work for Hire” illustrator, not a partner.
- Silence Social Media: Do not delete past tweets (spoliation of evidence), but stop posting.
- Find a Specialist Broker: Do not call Geico. Call a broker who specializes in “FinTech” or “Web3” insurance.
- Notify Carrier: If you have standard E&O, report it anyway. They might defend you under the premise that you are a graphic designer, while reserving the right to deny if it turns into a securities fraud verdict.
FAQ
I didn’t code the contract. Why am I sued?
In class-action lawsuits, lawyers cast a wide net. They sue everyone on the “Team” page.
Does General Liability cover this?
Zero chance. This is purely financial loss, not bodily injury.
What if I was paid in ETH?
That doesn’t change liability, but it complicates value. Insurance pays claims in Fiat (Dollars).