I own elicenser and Cubase Pro. And I am happy, that Steinberg will replace my licenses, when the dongle gets lost, stolen or broken. They register the dongle key and the software license. So when you lose the key, there will be only cancelled the elicencer and you get a new activation code for your software that you can register to a new dongle.
If you purchase a new dongle every two years and transfer your licenses to the new dongle then malfunctions should be covered. Just send the bad dongle in and ask for some demo licenses to keep you going until they can get things sorted out. Only malfunctions will be covered, not lost or stolen, and you better believe that they are going to scrutinize that bad dongle to be sure that it didn't malfunction due to negligence on your part i.e. you used it to scrape ice off your car windshield on a cold morning, chew toy for the puppies, etc.
All the veteran forumites know that this is a real sore subject around here (search the forum for more details). So the best way to keep yourself covered is to buy a new dongle every two years and transfer the licenses then think about getting some insurance (again, search the forum for more details) depending on how much you have invested in this. Nuff said!