Brokers searching for business would do well to find clean tech company executives.
When clean tech company executives look for insurance advice, they are much more likely to turn to insurance brokers than other financial professionals, according to research by Chubb Insurance.
One reason could be the multi-layered approach to liability insurance that clean tech companies often require, brokers say. Protecting the company’s executives is often a complex task.
“You could have a small tech firm as a start-up,” said David Potter of KRG Insurance. “As a start-up, they need to get their policy for the first time, and the question is: What sort of policy do you need?
“If they are doing contract work with government agencies, they need liability insurance. Going forward, they may need general liability insurance, professional liability insurance, errors and omissions insurance, and they probably also need some cyber-coverage with respect to loss of information.
“That’s the minefield you have to walk through.”
In some situations, clean tech companies may not even know what coverage they have. One broker recalled a clean tech client calling to inquire about increasing the company’s general liability coverage up to $2 million, only to find out that they were covered under a professional liability insurance policy.
The complexity involved in securing the right insurance coverage may be one reason why clean tech executives are likely to turn to brokers and agents for their insurance advice.
A Chubb 2012 Clean Tech Industry Survey asked 268 clean tech company executives in Canada and the United States to whom they went for their insurance advice. Sixty-nine per cent said they turned to their insurance broker or agent. Twenty per cent went to their peers, while 14% sought a legal advisor, 6% consulted their accounting firms, 4% talked to their banker and 3% visited a venture capitalist.
Once you have the ear of a clean tech executive, what might you advise?
How about creating a supply chain interruption plan?
Thirty-six per cent of clean tech companies have not created a supply chain disruption plan, the Chubb survey said. Additionally, 45% of all survey respondents have not instituted best practices to help prevent cargo theft, and 59% do not have an up-to-date business recovery plan.
More than half of the 71% of clean tech companies that conduct business abroad do not purchase workers compensation protection for employees who travel outside the United States.
