New models of small businesses, many of which are tapping into the growing sharing economy, are rapidly sprouting up – but as entrepreneurs pursue the “Uberization” of the market, they may be open to unknown liability.
As many of these businesses involve the transport, access or repair of other’s property, they may have a tough time getting the coverage they need, says Sam Natur, president and CEO of Bullfrog Insurance. However, he sees their unique needs as an opportunity.
“Certain players in the industry are seeing them as risks that they don’t want to touch,” he says, adding, “Like all other industries, things evolve. My view has always been that if you’re not evolving and keeping up with changes in the landscape, then it’s just a matter of time before you become obsolete.”
He says third party liability coverage is most commonly sought by this group to guard against any potential damage against a client’s property, followed closely by professional liability policies.
“(That’s important) in the case they may do something in a method that’s not compliant with industry codes or regulations and cause some damage,” he says.
“As well, some of them do want to insure their assets, the actual property related to their business.”
He says that insurance can be tough to navigate for entrepreneurs, who are often overwhelmed with the challenges of operating a new business, and that it’s important for carriers and brokers to do their due diligence in getting their insureds properly equipped.
“Typically our business owners are in the first year of their business,” he says. “They may be absolute professionals in what they’ve done, but probably have years and years of experience as an employee. But now they’re going at it on their own, and there’s no handbook for entrepreneurs.
“That’s what they tend to need assistance with, and it’s not limited to just insurance.”
He adds that the small business market is often underserved, a gap Bullfrog’s founding group – which was comprised of small business owners – looked to fill when launching the insurance company.
“What they saw was that small business was underserved, just because it’s small,” he says. “If you’re going to put a hefty fee on a business development person, you don’t want them to go after a $500 or $1,000 policy – you’d rather have them go after something that’s $5,000 - $10,000.”
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