This is fundamentally great news. Insurance is a great hedge against risk. In this case a bitcoin "bank" believes it can reduce the risk of someone stealing all

This is fundamentally great news. Insurance is a great hedge against risk. In this case a bitcoin "bank" believes it can reduce the risk of someone stealing all the deposited bitcoins and running off with them. Llyod's has a very interesting and long history of insuring things that are outside the realm of "normal". Read about it on wikipedia. The end result is I now have a choice. I can store my bitcoins on my own computer or pick an insured bank. If the bitcoins are stolen out of the bank I can be sure I will get my money back because they are backed by a very large insurance company. Llyod's has a huge amount of capital available and they have been in the business a long time. As an insurance company this is important because you get to see lots of black swan events (and realistically how often they end up happening). I am sure their analysts have looked at what happens if someone ends up stealing all the bitcoins vs how much money they can make off insuring against this risk. They can give bitcoin websites discounts for security audits and how they store their data.