Nexus Mutual is not an insurance company. Nexus Mutual is run entirely by its members. Only members can decide which claims are valid. All member decisions are recorded and enforced by smart contracts on the Ethereum public blockchain.
When joining the mutual prospective members need to agree to the Nexus Mutual DAO Member Agreement. Compared to other DAO’s this provides increased structure and clarity from a legal perspective.
Membership rights are represented by tokens. Tokens can be used to purchase cover as well as participate in claims assessment, underwriting and governance. All funds raised from token purchases belong to members.
Smart Contract Cover is not a contract of insurance. Fellow members will decide on claims. Claims payments are enforced by token driven economic incentives rather than placing trust in an insurance company.