Just a reminder that Coinbase custody is a different product to the app you install from the App Store. The faq you posted I believe refers to the latter.

If you are a large institutional investor you would likely use this and not a normal coinbase account.

I don’t work on custody but they may have a different insurance policy and or do things on a case by case basis: http://custody.coinbase.com/faq

“ What storage systems does your insurance cover? - Coinbase’s policy covers all storage methods. This includes hot, warm and cold storage. Read more about our insurance policy here or ask the Custody team for more information.”

If you are interested in learning more here is a good article on insurance and cryptocurrency:

https://blog.coinbase.com/on-insurance-and-cryptocurrency-d6...