This would be an interesting question to have GIGAMINING give an answer on which the market could then begin to rely upon.
This is a perpetual bond where the coupon is tied to the amount of production at that difficulty.
There is nothing about there needing to be any actual hardware, let alone any insurance, for the bond to be valid. Any claim of actual hardware 'backing' the bond or any insurance for any represented hardware is to provide confidence in the ability of the counter-party to service the bond but the contract imparts no rights to the equipment or whether that equipment is insured.
HYPOTHETICAL EXAMPLE
It may be helpful for people to consider the following possibilities when attempting to value a bond for both the GIGAMINING issue and other instruments which are offered since mining bonds are ripe for a Ponzi scam. The reason is because the various counter-parties should not all have such similar interest costs which implies a similar 'credit rating'. Higher quality counter-parties, like GIGAMINING or BITBOND in my opinion, should result in greater bond premiums (How To Value A Bond).
Let us assume for the sake of argument that a meteor crashes into the data center and destroys all of Gigamining's equipment or if the equipment fails and is not covered by warranty. Gigamining is still individually liable for the coupon payments. Should he default on payments then a lawsuit could be filed, Nefario's verification information via subpoena could be demanded and a judgment against Gigamining could be obtained.
If GIGAMINING represented owning or possessing the hardware and never actually had any hardware or rights thereto and if it were done with an intent to induce reliance then that would constitute fraud and could be pursued both criminally and civilly. Then in defense GIGAMINING would provide receipts, pictures, videos and testimony that he actually had the hardware. For example, I have personally seen the GIGAMINING hardware so I could function as a witness that he was actually in possession of the hardware although I could not attest to the veracity of whether he owned it or had rights to it, etc. because I do not personally know that.