How does BDIC process an insurance claim?
Blockchain Deposit Insurance Corporation (BDIC) processes insurance claims automatically using smart contract logic. When a qualifying loss event occurs, a predefined smart contract verifies the conditions, confirms reserve pool availability, and settles the claim on-chain without requiring human review or approval.
This article explains how that process works, why it is structured this way, and what it means for crypto holders who need to file a claim.
What is a smart contract claim?
A smart contract is a self-executing program that runs on a blockchain and executes automatically when predefined conditions are met. In the context of BDIC, a smart contract claim is an insurance claim that is verified and settled entirely through on-chain logic, with no human adjuster involved in the decision.
The claim parameters are established when the policy is issued. The contract checks those parameters when an event occurs. If the conditions are satisfied, the claim proceeds. If they are not, it does not. There is no gray area, no case-by-case negotiation, and no waiting for someone to review a file.
Step 1: A qualifying loss event occurs
BDIC policies cover specific, predefined loss events: verified exchange failures, confirmed on-chain exploits, and other triggers defined in the policy terms. When one of these events occurs, it initiates the claim verification process.
The event must be verifiable on-chain or via an approved oracle. Unverifiable losses, such as a user sending funds to the wrong address, fall outside the coverage parameters.
Step 2: Smart contract verification
Once a qualifying event is identified, the smart contract checks the policyholder’s coverage tier, confirms the loss falls within the covered parameters, and validates that the event meets the predefined trigger conditions. This process runs automatically. No human reviews the case at this stage.
Step 3: Insurance Reserve Pool confirmation
Before any claim settles, the contract confirms that the Insurance Reserve Pool has sufficient backing. BDIC holds 528 million BDIC Coins, representing 33% of the total token supply of 1.6 billion, locked in the reserve pool as collateral. This pool is visible on-chain and verifiable by anyone at any time.
The reserve confirmation step ensures that claims are only settled when the backing exists. It removes the opacity that characterizes traditional insurance reserve management.
Step 4: On-chain settlement
Once verification and reserve confirmation are complete, the claim settles directly to the covered wallet on-chain. BDIC offers two coverage tiers: Standard coverage from $0 to $10,000 per holder, and Preferred coverage from $10,000 to $20,000 per holder. Settlement is processed within the policyholder’s elected tier.
Why does this matter?
Traditional insurance claims introduce delay, inconsistency, and opacity at every step. An adjuster’s workload, their employer’s incentive structure, and their individual interpretation of policy language all affect outcomes. None of those factors is visible to the person filing the claim.
BDIC’s smart contract model removes those variables. The conditions are public. The logic is auditable. The reserve is visible. Every policyholder’s claim follows the same process, with the same rules applied.
In 2025, $17 billion was stolen in crypto scams and fraud, according to the Chainalysis 2026 Crypto Crime Report. Less than 2% of crypto assets are currently insured. The gap is structural. The lack of a reliable, transparent claims process has been one reason crypto holders have not adopted insurance at scale. BDIC is built to close that gap.
Learn more at BDICinsurance.com.
A secure wallet is a secure mind.
How BDIC Processes Insurance Claims Automatically via Smart Contract was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.
