# Swap Loss Coverage

## **Policy Duration:**

The policy's duration is expressed in weeks and begins at 0:00 UTC on the chosen start date (Sunday) and ends at 0:00 UTC on the chosen end date (Sunday).

## Payout condition:

Policyholders will get compensation up to the maximum coverage amount in the event that assets are lost during the swap hosted by NativeX Protocol as a result of a smart contract exploit, depending on the actual loss caused by the vulnerability. 

If the exploit damage is equal to or greater than 100% of the insured amount, 100% of the covered amount will be paid out. A lesser amount should be used when the exploit damage is less than 100% of the covered amount. 

In the unusual but nonetheless probable event of a collateral shortfall (insufficient collateral to compensate policyholders), policyholders will receive collateral in proportion to their shares of the overall coverage amount.

A collateral shortage event may occur when multiple policies are activated at the same time and there is insufficient collateral to pay out the harmed policyholders from both protocols. It is a low-probability event, but it is difficult to eliminate such a risk in all insurance scenarios.

## Refund:

Additionally, policyholders are eligible for a return if the required collateral amount is less than the outstanding insurance amount. Such a scenario could be triggered by a large payout, for example. The unprotected amount will be automatically repaid to policyholders' wallets every week until adequate collateral deposits are made to cover the outstanding policies. 

## Claim submission:

Claims can be submitted on-chain, and pool managers will be notified to conduct a payout.

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