Insuring Startups
female business owner writing on paper

In the world of startups, every dollar counts when budgets are tight and profit margins may be thin. For some startup companies, insurance may be a back-of-mind item – especially if not required by law. But that mindset could allow losses to become potentially business-ending events if proper coverages and risk transfer programs are not in place.

It’s vital for businesses of all sizes – particularly startups – to have a comprehensive insurance program. So how can agents and brokers better inform clients and help close the knowledge gap?

One of the most important things that agents and brokers can do for their startup clients is to reinforce the fact that they – together with their carriers – are not only there in the case of a loss, but also can serve as risk partners to help mitigate exposures. An agent or broker can provide best practices, direct clients to necessary experts, and serve as trusted counsel as the startup grows and evolves.

A startup founder’s priority is putting together a business from scratch; having a dedicated partnership with a larger carrier can help founders better understand the specific exposures facing their company and provide recommendations on how to help mitigate them. Is their company hiring? What are the requirements for workers comp? What coverage exists for contractual agreements? What about coverage for equipment breakdown or cyber risks? Having an insurance partner that can help answer all of these questions is an invaluable service that agents and brokers can point customers to, to showcase the tangible benefits of a dedicated risk partner.

Closing the knowledge gap is only one piece of the startup puzzle for agents and brokers. Another is finding carriers that have the ability to provide a comprehensive insurance program.

It should come as no surprise that insuring startups is inherently risky. Roughly 50% of startups fail by their fifth year according to the Bureau of Labor Statistics – something that most entrepreneurs understand. This can make assessing individual insureds to determine risks more thoroughly tricky due to the lack of data. Agents and brokers must do their due diligence to identify the key and unique risks facing each startup.

For this reason, it’s important for startups to partner with trusted insurance agents and brokers, and be transparent about their current and emerging needs, risks and concerns. This way, agents and brokers can provide counsel and help build the proper insurance programs to help minimize potential coverage gaps and help ensure the company’s long-term success.

Additionally, some industries see more successful startups than others. Tech companies, for example, are seeing a high rate of startups due to a boom in robotics, automation, artificial intelligence, and more. Technology is everywhere and ever evolving, feeding into most all industries. Life sciences and manufacturing have also emerged as hotbeds of startup activity, with more companies in these sectors surviving to become larger established firms. Therefore, startups in these industries may pose a steady stream of opportunity for agents and brokers.

Agents and brokers that begin working with startup companies in their nascent stage and prove their value as risk partners can continue to reap the benefits of their business as the company scales and evolves its workforce and product offerings.

To learn more about what type of solution would best support your clients’ growing businesses, work with a carrier that’s dedicated to not only serving startups, but also experienced within these industries, and one that offers the tools, products, services and agency education resources that will support agents and brokers and their clients long-term.


Nicole Troxell is Vice President, Marketing Manager, Chubb Insurance Solutions Agency (CISA)

The opinions and positions expressed are the authors’ own and not those of Chubb. The information and/ or data provided herein is for informational purposes only and is not a substitute for professional advice. Insurance coverage is subject to the language of the policies as issued.