Irreversibility
A transaction confirmed on a chain cannot be undone: the insurer recovers nothing, and the loss is always total.
Textbook case: a collector signs a booby-trapped transaction, the NFT goes to an unknown address, and nothing will bring it back. Neither a classical theft nor a mere error, this is a deception that exploits irreversibility, the impossibility of undoing a transaction once it is confirmed on a chain. In classical finance, fraud is often clawed back: the card gets blocked, the wire recalled, the charge disputed, and the insurer only steps in as a last resort on what is left. On a chain there is no recall. The underwriter therefore faces a loss that tends toward total, with no partial recovery to count on, and average severity goes up, the premium with it. There are exceptions (a stablecoin issuer freezing tokens, a centralized exchange blocking a withdrawal), but they depend on a third party and not on the protocol. Existing wordings, drafted for theft or for error, struggle to place this third category.
Stealing an NFT is neither a classical theft nor a mere error. It is a deception that exploits irreversibility, and existing policies struggle to grasp it.
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