Claim Assessment
When you buy cover to protect yourself against risk and suffer a loss, you can submit a claim in the Nexus Mutual app. Once you have submitted a claim, the Claims Committee reviews your claim submission and the information you provide, assesses the validity of your claim, and votes on your claim. This is a general overview of Nexus Mutual's Claim Assessment process.
Let's take a look at each step of the Claim Assessment process in more detail.
Submitting a Claim
Nexus Mutual members buy cover to protect themselves against a variety of risks. If you purchase cover to protect your crypto and subsequently suffer a loss, you can file a claim by heading to the Your Covers section of the Nexus Mutual app. In that section of the app, you will see an option to select Claim, which will take you to the first step of the Claim Submission process.
Of note: If you need to file a claim, Claim Assessors can help you calculate your loss amount and review the details of your claim before you submit the claim onchain. You can reach out to Claim Assessors using the in-app chat or the Nexus Mutual Contact Form. This ensures that you are not missing any information ahead of submitting your claim.
Step 1: Incident Details
When you select the Claim option on your cover, you will be directed to the Incident Details page (the first step of the Claim Submission process) and asked to provide the details about your loss and any supporting evidence for your claim.
On the Incident Details page, you will see the following fields:
- Did the loss occur onchain or offchain?. You will select either onchain or offchain depending on where your loss occurred.
- Select the chain where your loss occurred. If you selected onchain in the field above, you will need to select the chain where your loss occurred. There is a drop-down list of the supported chains that you can choose from in this field.
- Please enter your affected address. If you suffered an onchain loss, you will enter the blockchain address where you held funds that were impacted by the loss event. You can enter multiple blockchain addresses in this field if you suffered a loss across multiple different blockchain addresses.
- Please provide an overview of how the loss occurred. You will use this field to enter in the details about your loss. Sharing links to your original deposit transactions, the post-mortem report for a hack, etc., are all examples of supporting evidence you can include in this field. Claim Assessors will use the overview and information you provide in this field to validate your claim submission.
- Please share any files, screenshots, and/or supporting evidence that can help assessors validate your claim. You can upload images, documents, etc., in this field, which Claim Assessors will use to validate your claim.
Once you have entered in all of the incident details, you can proceed to the Proof of Loss step.
Step 2: Proof of Loss
Nexus Mutual requires cover holders to provide proof of loss when they submit a claim. The proof of loss required varies depending on the cover product. For most of Nexus Mutual's cover products, onchain proof of loss is required when a loss occurs onchain.
For onchain proof of loss, Claim Assessors will require one or more of the following forms of cryptographic evidence:
- If the affected address is the same as your Nexus Mutual membership address, filing a claim with that address is sufficient onchain proof of loss.
- If the affected address is different than your Nexus Mutual membership address, you will be required to:
- Sign a message from your affected address during the Claim Submission process to verify ownership of that address; OR
- Send a zero-value transaction from your affected address to verify ownership of that address.
For offchain proof of loss, you will see the information required to provide proof of loss in the Nexus Mutual app.
You will be prompted to provide proof of loss before moving to the Reviewing Claim Details step.
Step 3: Reviewing Your Claim Details
Once you provide the incident details and proof of loss, you will need to review all of the information you have included with your claim. This last step is the final check before you submit your claim onchain for Claim Assessors to review.
Confirm all of the information is correct before proceeding to file your claim. Once you have confirmed, you will file your claim and Nexus Mutual's Claims Committee will review your claim submission.
Expert-Led Claim Assessment
Nexus Mutual's Claims Committee is responsible for assessing the validity of any claims submitted. There may be cover products with a Designated Claim Assessor that is separate from the Claims Committee; however, the Claims Committee will handle the majority of the claims submitted.
The Claims Committee is made up of publicly known experts with an established record of assessing claims within the Mutual. Currently, Nexus Mutual's Claims Committee has three members:
- Hugh Karp, Advisory Board Member. Hugh is Nexus Mutual's founder and brings a wealth of traditional insurance expertise along with half a decade of onchain risk expertise to the Claims Committee.
- Roxana Danila, Advisory Board Member. Roxana is Nexus Mutual's CTO and brings engineering and onchain analysis expertise to the Claims Committee.
- BraveNewDeFi, Head of Risk. BraveNewDeFi is Head of Risk and has been managing claims incident response since he joined Nexus Mutual in 2021. Brave brings his onchain risk and analysis expertise to the Claims Committee.
These risk experts will review the incident details and proof of loss provided by claimants and use that information to determine whether a claim is valid (meets the terms and conditions outlined in the cover wording) or not valid (does not meet the terms and conditions outlined in the cover wording).
Assessing Active Claims
Once you submit your claim, the Claims Committee will be alerted and begin their review.
Any claim that is submitted will be open for voting for at least 72 hours. During that 72 hours, Claim Assessors will review the details provided, discuss the validity of your claim, and cast their votes. At least 2 of the 3 Claims Committee Assessors need to cast accept votes for a claim to be accepted.
Once the Claim Assessors cast their votes and the 72-hour period ends, voting on the claim will close.
Note: Claim Assessors are required to provide the rationale behind their decision to accept or deny a claim when they cast their vote. Claimants will be able to review this information after the voting period ends for a claim submission.
Claim Outcomes
Once voting on a claim has closed, there is a 24-hour cool-down period that must pass before the claim outcome is finalized. This 24-hour period allows the Advisory Board to determine if fraud has occurred during the voting process. If fraud does occur, the Advisory Board has the power to reverse a fraudulent vote and replace any Assessor who engages in fraudulent voting.
Your Claim is Accepted
If Claim Assessors review the details and proof of loss provided and determine your claim is valid (meets the terms and conditions outlined in the cover wording), they will vote to accept your claim submission.
If Claim Assessors vote to accept your claim, you will be able to withdraw your claim payment after the 24-hour post-claim cool-down period ends. After a claim is accepted, you will have 30 days to withdraw your claim payment.
Your Claim is Denied
If Claim Assessors review the details and proof of loss you provided and determine your claim is not valid (does not meet the terms and conditions outlined in the cover wording), they will vote to deny your claim submission.
If your claim is denied, you will be able to appeal the decision and file another claim with more supporting evidence and information on why your claim is valid and should be accepted.
Claims History
Nexus Mutual's Claim Assessment process has been battle-tested since 2019 when the protocol first launched. Since then, the Mutual has paid out millions of dollars worth of claims to members who purchased cover and subsequently suffered a loss.
To audit Nexus Mutual's past claim submissions, you can use the following resources: