A new opportunity for 1099 employers: Inclusive Insurance

New research highlights inclusive insurance as a new opportunity for companies who employ 1099 independent contractors. With the majority of Americans being under-insured and the 1099 economy continuing to expand, employers are able to use inclusive insurance to reward independent contractors for behaviors that drive corporate KPI’s.

Independent Contractors are signi:cantly under-insured in the US.

Americans are under-insured

Forty percent of adult Americans don’t have life insurance, 80 percent don’t have disability insurance, and 59 percent of renters don’t have renter’s insurance, according to Insurance Information Institute’s “2018 Insurance Barometer Study, Life Happens and LIMRA” and “2018 Facts + Statistics: Renters Insurance.”

These findings are especially troubling for low- to middle-income consumers, who are often severely impacted by just one financial shock, such as unexpected medical costs or accidents. In a survey by the Center for Financial Service Innovation, 40 percent of Americans earning under $60,000/year say unexpected financial shocks prevented them from pay bills on time, and 45 percent said financial shocks affected their ability to control debt, an impact that can lead to spiraling debt (“Insuring the Way to a Financially Resilient America; Developing Successful Products for LMI Consumers,” June 2018.).

However, as researchers from the CFSI state, “[Insurance can] provide a safety net for individuals when they face disruptive life events, such as major home repairs, income lost to unemployment, a pay cut, illness, injury, and death… Insurance is a critical tool that provides protection, even in the absence of any savings cushion.”

How 1099 employers benefit from inclusive insurance

Insurance is a safety net Americans need, especially workers in the 1099 “gig” or independent contractor economy. Not only a tool that can help workers when they face disruptive life events, insurance is also an add- on that can benefit employers.

There are already millions of independent contractors, and they are predicted to make up the majority of the U.S. workforce by 2027. (“Freelancing In America”, UpWork/Freelancers Union, 2017.) The struggle for 1099 workers is that they are often working more than one “gig” and they have to supplement their own insurance benefits. Inclusive insurance (or micro-insurance) fills that gap to support workers and employers.

Employers can offer inclusive insurance free, in exchange for predetermined units of work which advance corporate objectives. For example, a contractor who works 20 hours a week may receive free life insurance in a relative value to the 20 hours of work.

Inclusive insurance gives workers more protections against disruptive life events or financial shocks, while providing ROI benefits to employers. Potential benefits for companies offering inclusive insurance include less employee churn, reduced costs in turnover and onboarding, a more loyal workforce, and improved customer experiences with your products or services.

Inclusive insurance is the next wave of insurance

With the prevalence of under-insured Americans, inclusive insurance is the next evolution of the independent contractor economy. It offers companies a way to support 1099 employees and reap the benefits of a more stable, loyal workforce.

ostraa partners with companies to offer turn-key inclusive insurance programs. ostraa’s model is a business solution to solve the social issue of under-insured Americans, and it’s a social solution that solves the business issues of companies in need of quality independent contractors.

Let us know how we can help your company partner with ostraa to offer inclusive insurance to your independent contractors.

Learn how an Inclusive Insurance program can benefit your business (and how it’s working for United Taxi Management). Download Grow Your Business with An Inclusive Insurance Program.

Contact us as Maximilian.Weiner@ostraa.com.