# Insurance Fund (Metavaults)

Peapods Metavaults are protected by an Insurance Fund, designed to provide a safety buffer in the event of unexpected losses or bad debt events.

#### Fund Size & Backing

* The Insurance Fund is backed by a minimum reserve of $200,000.
* These funds are reserved specifically for the purpose of risk mitigation across all active Metavaults.
* Governance (via vlPEAS votes) may choose to increase this minimum reserve threshold, but it can never be lowered below $200,000.

#### Purpose & Scope of Use

* The Insurance Fund is strictly limited to covering bad debt scenarios incurred by any Metavault.
* **Decision-Making Authority**:
  * Deployments from the Insurance Fund must be approved by either:
    * A vlPEAS governance vote, or
    * The Peapods Finance core team, if urgent action is required.

#### Limits of Protection

* The Insurance Fund is capped by its available balance.
* Once depleted, no further coverage is available until additional funds are allocated.
* The Insurance Fund does not guarantee against all losses, but instead provides a structured safety net to minimize systemic risk.

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> **Disclaimer**\
> \&#xNAN;*The Insurance Fund should not be relied upon as a guarantee of repayment or full coverage for all participants. Users assume the edge-case risk that losses may exceed the available balance of the fund.*