How to Convince Brokers to Insure Your Startup | Business Town

How to Convince Brokers to Insure Your Startup

 Convince Brokers to Cover Your Startup From telling your story to having a great business plan, learn how to persuade brokers to insure your business.

 

Why Won’t Insurance Companies Take My Business?

You’ve got a great new idea, a great new business, and you need to place some insurance for it. Insurance brokers don’t seem to be too interested in writing your insurance. What’s that all about? Hi, I’m Jeff Gordon from Gordon Atlantic Insurance.

How Risky is Your Start-Up?

Here’s the thing: many startups don’t make it, but insurance brokers and insurance companies and agents want to develop longer-term relationships. Oftentimes, working with startups is risky.

Insurance companies will charge more for a new business because they don’t really know what they’re doing on all aspects of controlling their risk costs. So it can be expensive and it can be complicated.

Related: Which Insurance Does My Business Need?

How to Attract an Underwriter

Here are some of the things that you can do to make your business attractive to an underwriter.

First, show some good credentials from the principals. If there are two or three or four people that are starting this business and you’ve done other things successfully, then tell the story! Provide CVs and information about your business plan. Detailed information about a business plan is so much more effective than just saying “hey, we’ve got a great idea and we’re going to make a ton of money.”

Related: What Is a Business Owner Policy?

Truth in Advertising

If your website is up, make sure that it really tells the truth. Here’s a great story on a startup company. It was a service company that had one vehicle. We submitted it to an underwriter and the underwriter called me up and said, “hey wait a minute, you’re submitting one vehicle but this guy’s got twelve trucks on his website.”

So I went to his website, and sure enough, there’s twelve trucks. Eleven of them were photoshopped trucks. He wants to look like a big business, but the insurance underwriter is thinking “wait a minute, we’re insuring twelve trucks for the price of one.” That wasn’t the case at all.

Related: What Is Co-Insurance?

What Are Underwriters Looking For?

If you’re telling the world about what you’re doing you’re telling the underwriters too. Good underwriters are going to do their research on your startup.

Hire The Right Professional For the Job

To develop an insurance program for a startup, it’s important that you work with a professional that works with other startups who can give you other advice about managing risk beyond just transferring it through insurance. Managing risk is very important to underwriters and it makes you more attractive to underwriters to get a lower insurance rate.

What Is a Certificate of Insurance?

About Geoff Gordon

Geoff Gordon has been the owner/president of the Gordon Atlantic Insurance agency since 1987. Gordon Atlantic Insurance provides commercial and personal insurance to businesses and families throughout Massachusetts.

A prolific writer and recognized industry thought leader, Geoff has contributed articles to Banker & Tradesman, a regional trade periodical, and served on the Quincy Patriot Ledger’s Board of Economic Advisors column. He is a member of the Plymouth Rock Assurance Agents Advisory Council as well as the Bunker Hill Insurance Agents Advisory Council. Geoff has presented to the Financial Planning Association’s (FPA) education series and teaches locally. Most recently Geoff spoke to a TEDx conference on “Personal Risk for a Rich Life” in February 2016.

Geoff obtained his Certified Financial Planner (CFP®) designation in 1985, the Certified Insurance Counselor (CIC) in 1995, and his Certified Risk Manager (CRM) designation in 2004, and serves as an Asssociate Faculty member of the Institute of Insurance Education and Reasearch, a national credentialling organization.

QUIZ: WHAT BUSINESS IS BEST FOR YOU?

QUIZ: WHAT BUSINESS IS BEST FOR YOU?