{"id":10245,"date":"2014-12-07T10:00:00","date_gmt":"2014-12-07T15:00:00","guid":{"rendered":"https:\/\/www.wework.com\/creator\/?p=10245"},"modified":"2020-03-30T18:43:39","modified_gmt":"2020-03-30T22:43:39","slug":"purchasing-business-insurance-startups","status":"publish","type":"post","link":"https:\/\/www.wework.com\/ideas\/professional-development\/purchasing-business-insurance-startups","title":{"rendered":"The stress-free method to purchasing business insurance for startups"},"content":{"rendered":"

Buying insurance can be a daunting task, particularly for venture-backed startups. The market for relevant insurance products tends to be fragmented and a finding a broker that understands tech can be tough. Sometimes, just getting the ball rolling can be confusing!<\/p>\n

With that in mind, here\u2019s an introduction to purchasing insurance:<\/p>\n

What to do:<\/h2>\n

1. Vet Your Broker<\/strong><\/h2>\n

While there are some generalists out there, most brokers earn their success by mastering an industry. Make sure that your broker fully understands your business model and where the inherent risks to your company lie. A good broker will look at your company from all angles and leave no stone unturned. How do you make this choice? Same as any business partner, vendor, or service provider.<\/p>\n

Ask your investors and fellow founders for their opinions and recommendations. Do your research on potential broker-partners and get a feel for their philosophy and approach. Engage in a dialogue with your broker to verify what your research. Check in with current clients (if possible) to see how their experience has been with the brokerage. Make sure you understand the application process and you\u2019re on board with the broker\u2019s methods.<\/p>\n

2. Ask Questions<\/strong><\/h2>\n

Make sure you feel good about this partnership because having to explain and re-explain your business to every broker you work with just causes more headaches as the company grows. You want your broker to have your back and be excited about your business and its roadmap.<\/p>\n

Once you\u2019ve found your insurance broker, don\u2019t hesitate to dig into the coverage and ask questions. Insurance should be viewed as an investment rather than just another cost and your broker should know this. Make sure that you\u2019re making the right investment. You want the proper coverage for your risk profile, flexibility to modify coverage as your company changes, and scalability to layer on coverage as your company grows.<\/p>\n

What not to do:<\/h2>\n

1. Go to Multiple Brokers (at first\u2026)<\/strong><\/h2>\n

The usual \u201cshopping around\u201d method doesn\u2019t really work in your favor when buying your business insurance. Here\u2019s why:<\/p>\n

    \n
  • \n

    When a broker approaches an insurance company on your behalf, they become the exclusive \u201cbroker of record\u201d that can work with carrier. Only one broker can talk to any one carrier at any given time. This gives the broker the best chance to make his\/her case on your behalf without any distractions.<\/p>\n<\/li>\n

  • \n

    When you approach multiple brokers at the same time, they\u2019ll almost certainly go to the same markets (those that are best for your specific company) if they\u2019re doing it right. Depending on the order in which you approached each broker, each will be blocked at certain markets because another has already approached them. The process is now jammed up and you\u2019re pushed into choosing the preferred broker as you should have done in the first place.<\/p>\n<\/li>\n<\/ul>\n

    Vetting your broker and sticking with him\/her makes life so much easier. You want to make sure that you go with a broker that has strong underwriter relationships with the insurance carriers most relevant to your company. The application can be annoying and you don\u2019t want to do it more than once. The best broker for you will leverage the right underwriters at the right carriers the first time, saving you valuable time and effort.<\/p>\n

    If your broker strikes out on finding the right policy, now it’s time to approach another broker.<\/p>\n

    Pro Tip: Make sure you ask the previous broker for all the applications that were submitted on your behalf as well as a list of carriers who declined to present a proposal. This will expedite the process moving forward.<\/p>\n

    2. Withhold Information<\/strong><\/h2>\n

    Underwriters require quite a bit of information to create a coverage proposal. They\u2019re essentially extending you a multimillion dollar line of credit for when things go wrong. This is particularly true for policies vital to venture-backed companies, such as technology errors or omissions insurance, cyber liability insurance, or directors and officers insurance.<\/p>\n

    You\u2019ll need to submit things like financial statements, sample customer contracts, written HR practices, and investor decks. Information is king; you want to give your broker as much ammunition as possible to argue in your favor with the underwriters regarding your risk profile and annual premiums. Proceeding with weak\/incomplete information will lead to additional underwriter requests anyway.<\/p>\n

    To avoid headaches, the goal is to try to answer all underwriter questions in one shot to cut down the overall time it takes to get a formal proposal.<\/p>\n

    Hopefully these pointers will help make your insurance purchasing process as stress-free as possible!<\/p>\n","protected":false},"excerpt":{"rendered":"

    Buying insurance can be a daunting task, particularly for venture-backed startups. The market for relevant insurance products tends to be fragmented and a finding a broker that understands tech can be tough. Sometimes, just getting the ball rolling can be confusing! With that in mind, here\u2019s an introduction to purchasing insurance: What to do: 1. […]<\/p>\n","protected":false},"author":924,"featured_media":10394,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[43902],"tags":[],"class_list":["post-10245","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-professional-development"],"acf":[],"yoast_head":"\nThe stress-free method to purchasing business insurance for startups<\/title>\n<meta name=\"description\" content=\"Buying insurance can be a daunting task, particularly for venture-backed startups. 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