In a previous post I discussed how we have found that many Venture Capital firms pay more for insurance than they should - often for policies that don't even properly address the risks of their company. The National Venture Capital Association just circulated an illustration with 9 specific examples of their member firms who, through the VentureInsure program, have saved as much as 57% on their insurance costs (where's that Geico lizard now??), while getting better coverage.
Check this out - this represents only the basic office coverage such as General Liability, Property, Umbrella. Venture Capital insurance policies such as D&O and Professional Liability are not included in this illustration - however it is worth noting that historically the savings on that line of coverage, when moved to VentureInsure, has averaged more than 20%....
I didn’t see the A-Team movie this Summer, but have to admit as a child of the 80’s I was a big fan of the TV show. I remember vividly watching the pilot as a 13 year old after the Redskins beat the Dolphins in Super Bowl XVII. I know BA hates flying, I know the crack commando team went to prison in 1972 for a crime they didn’t commit, and I know that Hannibal (George Peppard, the only Hannibal) is a cigar smoking, master of disguise.
The real A Team
So what does this all have to do with insurance? Probably not alot…but here’s a shot:
We work with many VC’s as part of our role in managing the insurance program for members of the NVCA. And we have found that, like most innovators, Venture Capitalists are so focused on working IN their business that they sometimes don’t spend enough time working ON their business. This is evidenced with our frequent discovery of poorly structured insurance placements for VC’s, on even the simplest of insurance policies. (Clarification – it’s not a policy holder’s fault if their insurance is not up to par….that is their broker’s job. The policyholder is only responsible for choosing the right broker) Take a General Liability (GL) policy for example: every company has one of these babies. It covers your business for claims that you, your employees or products/services caused someone else bodily injury or property damage. But it also covers a wide variety of personal injury issues that could come into play for a VC. Since most insurers (I’m not aware of any) don’t have a specific classification in their policies for a VC firm, they will categorize them as investment advisors or some other similar financial organization. And in doing so they will also receive a myriad of exclusions that are typical for financial organizations….inluding ones that will severly limit their ability to cover personal injury claims. Insurers also worry about picking up vicarious risks stemming from activities of portfolio companies….hence, more exclusions.
Another problem in this scenario is the pricing. Since most insurers shy away from insuring smaller financial organizations (due to perceived high risk trading/transactional risk that could spill over onto a GL policy) they don’t even offer a small business policy. So most VC’s are placed on a policy that is designed, and priced, for larger firms.
Recognizing these issues and shortcomings our crack team at TechAssure set out with NVCA to build a solution for Venture Capital companies. The result, which is exclusively available to it’s members, corrects the coverage problems, removing almost every exclusion, and has reduced the average venture capital firm’s costs by more than 20%. The policy recognizes VC’s as a “small business” as it pertains to risks covered by basic insurance – the way it should be.
Ready for the tie-in?? As Hannibal Smith said best- I love it when a plan comes together.
After reading this article about digital media darling/rockstar @dens, I decided that I needed to show the World that no one, and I mean no one, has a more fabulous and exciting life than your host at InnovationGuard. And how would I prove this? Simple: by tracking down and hanging out with arguably the most famous person in the World – the Go2Meeting Guy. After a West Coast swing that included countless parties, red carpets, yachts, celebrities, dignitaries, front row seats, heads of state and paparazzi - I finally got my man. In order to protect his privacy, I cannot identify where this encounter took place (unless you email me). But as I think the video will show – this was no King of Comedy - he was there on his own free will. I took the opportunity to both direct and conduct an in-depth interview with him. Have a look.
NOTE: Fine, I’ll come clean….the Go2Meeting Guy is Bryan Costello. Bryan is a good friend and his firm, CSI Insurance, is a partner member at TechAssure. CSI is our West Coast counterpart, providing insurance and risk management solutions to the Innovators of Silicon Valley.
“The West is the Best…” Those wereMr Mojo Risin’s words, not mine. Personally, I’ll take the East coast every day of the week. And now with NY heating up, there is no better place to be if you work in or with the Innovation community. A couple of quick updates:
- As noted above NY Tech is hot – this recent article from NY Magazine highlights the NY Tech explosion http://nymag.com/news/media/65494/
- iGuard hits the road as next week is the semi-annual TechAssure conference, which is being held in San Francisco. I highlighted TechAssure in a previous blog post. Look for Twitter updates and some interesting takeaways in future posts. I’ll also have the FlipCam and hope to come back with footage of me with the guy from the GoToMeeting commercials ….I’ll explain later.
- The Business Insider has picked up on InnovationGuard and has republished a couple of posts. I always enjoy the pictures they select to accompany their articles. Their War Room provides a lot of good info for Startups
Who can resist a Top Gun quote?…….Over the past 10 years I have been fortunate to have had the opportunity to be involved with TechAssure. This is the world’s only association of insurance brokers who specialize in working with companies in the Technology industry. As one of the organization’s founders, I have been able to experience many of the challenges that our own clients have faced in building a new company: setting up a corporation with a management team, growing a client base (in our case additional members), developing products, organizing funding, cultivating partnerships, expanding internationally and recently even making an acquisition. The association exists as a collaborative platform where the world’s most experienced brokers in the High Tech Space can incubate the best insurance products and risk management solutions for our collective clients. It’s been a great ride and continues to get better. Here is a short video with some more info about the Tech industry’s “Top Gun” insurance brokers.