If you are looking to "invest" your bitcoin then your best bet is most likely going to be exchanges like bitfinex, poloinex and possibly okcoin (which apparently has some kind of insurance-like fund to protect lenders).
You will essentially be making peer-to-peer margin loans and the exchanges' risk management system will (attempt to) protect you against defaults as the exchange will force-liquidate the borrower's positions if markets turn against them too much.
You will need to trust the exchange with your coins and you need to trust that market volatility will not be too great because if it is too high then the people borrowing your coins may not be able to repay and if this happens to enough borrowers, the exchange may become insolvent.
You will essentially be making peer-to-peer margin loans and the exchanges' risk management system will (attempt to) protect you against defaults as the exchange will force-liquidate the borrower's positions if markets turn against them too much.
You will need to trust the exchange with your coins and you need to trust that market volatility will not be too great because if it is too high then the people borrowing your coins may not be able to repay and if this happens to enough borrowers, the exchange may become insolvent.
Bing, another business idea, bitcoin insurance
Interesting that you chose Quickseller's quote to post about bitcoin insurance...
What would stop one person from pulling an insurance scam under multiple IDs?
