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Insurance Business | 02 Jun 2013, 12:00 AM Agree 0
How do you provide risk management advice to a start-up company that has little more than a dream to its name?
  • DC | 04 Jun 2013, 01:14 PM Agree 0
    I work with and advise a good number of entrepreneurs/start-ups on Risk, Insurance and related matters.

    Entrepreneurs often have a high risk tolerance by default, if they are comfortable with high risk than it is our job (as brokers) to support the transfer of uncomfortable risk to insurers NOT to convince them to buy insurance on the face value of the product.

    I have 2 approaches with entrepreneurs:

    1) Get them to understand their risk appetite. Notwithstanding their inherent high risk tolerance, that is often a personality trait rather than their preferred commercial position. Once they understand the risks they face (mostly; products, cyber and professional liabilities) we can discuss example losses to then identify likelihood & impact of such loss and move the discussion to insurance products and premium pricing.

    2) I would discuss the entrepreneurs goals/objectives for their business/idea and advise what insurances can support them at the early stage and be expanded (endorsed) as the business needs/risk profile develops.

    Both approaches are specific and have a reasonably measurable outcome that insurance placement should be achieving (transfer of risk & support of growth), this makes sense to entrepreneurs and is valuable.

    If we, insurance professionals, cannot assist/help entrepreneurs with their plans to establish & grow than we will not get much traction with them or be seen to offer value but if we understand their often inherent high risk tolerance and how insurance can be of meaningful added value to them at the idea/start-up phase than we can be just as important as their bankers & lawyers!
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