Per-Vault vs Pooled Insurance: What's the Difference?

Pooled insurance covers a custodian's holdings in aggregate under a single policy limit, so one large loss can draw down the same limit that stands behind every customer. Per-vault or segregated insurance is scoped to individual custody arrangements rather than a shared pool, so how much protection each arrangement carries is defined at that level. Both are legitimate structures used across the custody industry, and neither is automatically superior. The difference matters because a headline coverage number means something different depending on how the coverage is structured and how many customers and how much bitcoin sit behind it. This explainer covers the distinction neutrally.

Key takeaways

• Pooled coverage insures a custodian's holdings in aggregate up to one limit shared across all customers.
• Per-vault or segregated coverage is scoped to individual custody arrangements rather than a single shared pool.
• A large loss can exhaust a pooled limit, leaving less or nothing available for others affected by the same event.
• The headline coverage number is only meaningful alongside the structure, the total assets under custody, and the covered perils.
• Neither structure is inherently better. The right question is how a given policy would respond to the specific loss scenarios you care about.

What pooled insurance is

Pooled insurance is a single policy that covers a custodian's assets in aggregate up to a stated limit. If the custodian holds bitcoin for thousands of customers, the policy responds to covered losses across the whole book up to that one limit. This is efficient and common, and for most routine loss events it works exactly as intended.

The structural feature to understand is the shared limit. Because the limit is aggregate, a single large covered loss can consume a substantial portion of it, or all of it. If a loss exceeds the limit, the excess is uninsured, and the available coverage does not scale up with the number of customers affected. A ten million dollar pooled limit is a ten million dollar limit whether one customer or ten thousand are affected by the same event.

The headline number also has to be read against the total assets under custody. A large-sounding limit that sits behind a very large pool of assets represents a smaller ratio of coverage to holdings than the same number behind a smaller pool. The limit alone does not tell you how much of your holding is effectively protected.

What per-vault or segregated insurance is

Per-vault or segregated insurance is structured around individual custody arrangements rather than a single aggregate pool. Instead of one limit standing behind the entire book, coverage is defined at the level of the specific vault, account, or arrangement.

The intended benefit is that one arrangement's loss experience does not draw down the coverage available to another. Where a pooled limit is a common resource that a single large event can deplete, a segregated approach aims to keep coverage scoped so that it is not shared away by an unrelated loss elsewhere in the custodian's book. This can align coverage more closely with the individual holder's position.

Segregated coverage is not automatically larger or better. It still has limits, exclusions, and terms, and it depends on how the underlying custody is actually segregated. Segregation of the coverage is most meaningful when the underlying assets and control are genuinely segregated too, which relates to custody architecture, not only to the insurance paperwork.

Why the structure matters as much as the number

A coverage amount is a headline. The structure is what determines how that amount behaves in the scenario you actually care about.

Consider a covered theft that affects many customers at once. Under a pooled policy, all affected customers look to the same limit, and if the loss exceeds it, recoveries are constrained by that shared ceiling. Under a segregated structure, coverage is defined per arrangement, so the response is scoped differently. Neither is guaranteed to make a given customer whole, but the two behave differently, and the difference is invisible if you only compare headline numbers.

This is why the pillar guide recommends asking not just how much coverage a custodian carries, but how it is structured, what it covers, and how it reaches the customer. The full checklist is in Bitcoin Custody Insurance: The Complete Guide (2026).

How this connects to custody architecture

Insurance structure and custody structure are related. A custodian that holds assets in a commingled pool is a natural fit for pooled coverage. A model that segregates individual holdings, or that distributes control across multiple institutions, lends itself to coverage scoped differently. Underwriters take the custody architecture into account when they price and limit coverage, which is covered in How Lloyd's of London Underwrites Bitcoin Custody. When comparing providers, look at both the insurance structure and the custody structure together. See the independent reviews at Onramp, Coinbase, and BitGo.

Frequently asked questions

Is per-vault insurance always better than pooled?

No. Neither structure is inherently superior. Pooled coverage is efficient and works as intended for most routine losses. Per-vault or segregated coverage aims to keep one arrangement's loss from drawing down another's protection. Which is preferable depends on the loss scenarios you care about, the limits and exclusions of the specific policy, and how the underlying assets are actually held. Structure is one factor to weigh, not a verdict on its own.

Can a pooled policy run out?

Yes, in the sense that a pooled policy has an aggregate limit that a large covered loss can exhaust. Because the limit is shared across all customers, a single significant event can consume much or all of it, and any loss beyond the limit is uninsured. This is the central structural consideration with pooled coverage, and it is why the limit should be read against the total assets under custody it stands behind.

Does segregated insurance mean my bitcoin is individually insured?

Not necessarily. Segregated or per-vault coverage means the coverage is scoped to individual custody arrangements rather than one shared pool, but it still carries its own limits, terms, and exclusions. Its usefulness also depends on whether the underlying assets and control are genuinely segregated. Confirm the specific policy terms and how they apply to your arrangement rather than assuming that segregated coverage equals a personal, unlimited guarantee.

How do I find out which structure a custodian uses?

Ask directly, and ask for specifics: whether coverage is aggregate or per arrangement, the limit, the covered perils, and the as-of date. A custodian should be able to describe how its policy is structured and how it would respond to a loss affecting many customers at once. If the structure is not disclosed, treat it as unknown rather than assuming the more favorable interpretation.

Why does the total assets under custody matter for coverage?

Because a coverage limit is only meaningful relative to what it stands behind. The same headline number represents more protection behind a smaller pool of assets and less behind a very large one. For pooled coverage especially, the ratio of coverage to total holdings, along with the covered perils, tells you far more than the limit alone about how much of a given holding is effectively protected.

The bottom line

Pooled and per-vault insurance are two legitimate ways to structure custody coverage, and the difference is about how a limit behaves, not just how large it is. Pooled coverage shares one aggregate limit across all customers, which a large loss can exhaust. Per-vault or segregated coverage scopes protection to individual arrangements. Neither is automatically better. When comparing custodians, read the structure alongside the headline number, the total assets under custody, and the covered perils, and treat undisclosed structure as unknown.

Related reading:

• Bitcoin Custody Insurance: The Complete Guide (2026)
• How Lloyd's of London Underwrites Bitcoin Custody
• Is My Bitcoin Insured on Coinbase?

Editorial note: This explainer is editorially independent and published by Onramp Bitcoin. It describes insurance structures in general terms and does not assert the specific structure any named platform uses except where publicly documented. See Editorial Independence.