The rising popularity of blockchain has cleared the path for developing numerous decentralized finance (DeFi) applications. However, insurance solutions for DeFi applications are still missing. Therefore, this article presents a smart contract-based P2P credit default insurance solution using the Design Science Research Method. The design presents an approach to decentralize insurance systems by reducing the number of intermediaries. The evaluation of the artifact shows that blockchain and smart contracts can provide financial inclusion, reduce costs and automate processes in insurance processes.