No matter how amazing your business idea may be, startups are inherently risky. Securing insurance for your great idea may prove to be a heavy lifting event, too. Many startups in today’s business environment don't end up making it, which is why insurance companies are much more hesitant to try and work with a business with no proven track record, and no guarantee of existing in the near future. Both carriers as well as brokers prefer to develop long term relationships with those they insure, and so the uncertainty that accompanies new businesses is often a deal breaker. Or, it results in insurance companies charging more for these newer businesses who have yet to figure out how they are going to manage and control risk costs.
So how can you make your startup business attractive to an underwriter?
It is important to show good credentials. Share information about your successes and provide detailed information about your business plan. A thorough plan outlining how you intend to address various challenges and obstacles, and ultimately find success, is an effective way to communicate to underwriters that your business has reduced risk and high potential.
Additionally, always tell the truth. Tell an accurate story and provide truthful, non-misleading information on your company website or when communicating with underwriters. A good underwriter will do their research, so honesty is the best policy if you want insurers to be willing to take on your startup.
Lastly, to develop an insurance program for your business, work with a professional who has worked with other startups in order to get other risk management advice beyond insurance. Learning how to manage and minimize risk across the board will make your business more attractive to risk-averse underwriters, and the premium charged will then hopefully reflect your risk navigation skill set.
Prefer to hear an explanation? Watch the video below as Geoff Gordon explains the steps you can take for the best chance of getting your startup business insured! If you have a question regarding your personal situation, use the form at the left of this blog for return call or email. Want to get straight to talking? Call the Gordon Atlantic Insurance professionals toll free at 1-800-649-3252.