Squirrel is an insurance platform that covers users from any issues that would prevent them from withdrawing and receiving their funds. By design this involves the following cases:
Nefarious activities such as intentional "rugs" that steal your deposits.
Bugs in the Farms, Vaults, or Smart Contracts that could accidentally lock your funds.
All other cases that could prevent you from withdrawing your funds.
If you can recover your deposited tokens, regardless of their value, Squirrels job is done. If you cannot, then Squirrel will compensate you with NUTS up to your insured value. See the insurance section for a more detailed explanation of how this works.
Squirrel will not protect you from inflation, price depreciation or any other tokenomics which may negatively impact the value of your investment. If you can withdraw your deposit from the farms, then Squirrel's job is done.