Startups can be among the riskiest businesses to insure. That’s because they operate in new markets and often with untested business models. Even worse, they often grow very quickly into unknown areas with unknowable risks.
For all these reasons entrepreneurs and innovators can sometimes find it hard to access the type of financial protection they need. This is a particularly pressing issue in the fast-track, fast-fail world of technology.
Despite these challenges there are plenty of underwriters who are looking for new types of risk to insure. Insurance is also a highly competitive marketplace, and underwriters are in fierce competition to offer the best prices, terms, and conditions to their customers.
Here are three things that will help you to secure the financial protection you need for your startup.
1. Explain clearly what you’re doing
This might be stating the obvious, but it’s difficult to insure something if you don’t understand how it works.
If you want an underwriter to assume risk on your behalf, you are going to have to make sure they understand exactly what it is they are insuring.
This can be tricky if you are operating in a completely new market, with new ideas, new concepts and new risks. Not many people outside your sector will be familiar with the details of what it is you’re doing.
How many people really understand cryptocurrency markets, for example? And yet crypto-insurance is a burgeoning market.
As more money flows through digital exchanges, losses from hacks on exchanges and trading platforms are on the rise. Nevertheless, cryptocurrency companies have found ways to protect their digital assets from theft and, by working closely with underwriters, insure losses ..
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