How Do I Get Insurance for a New Client Contract When the Requested Limits are So High?
My name is Terry Grier and let me tell you a story of a local Startup in Austin, Texas that I helped with an interesting situation earlier this year.
This startup worked day and night to get their product ready for the market, they fire up the sales team and start getting some traction and due to the hustle and value prop of the product they landed a big contract with well known company — one that you know by name.
So you might know the next part of the story. The contract gets emailed over and they start going through it great detail. They vet it out and all of their mentors and advocates say “go for it!”
You ask sign the contract and look forward to getting started when your new client asks for a certificate of insurance. WTF?
This is part of the story that I get called. My first take away is to get the insurance clause of the contract in the hands of your trusted insurance agent You need to get an understanding as to the financial impact and if the requirements are reasonable.
But it is more complicated than I present a quote and you write me a check.
Give Push Back (If Appropriate)
In my experience most of the contracts have boilerplate language when it comes certain sections of the contract, including the insurance clause. Underwriters might be cautious in extending high limits to startup. My recommendation is to give some respectful push back. A simple short email should get the conversation moving.
“Client, After reviewing the insurance section 4.15 of the contract, we feel that the coverage requested might be more than our scope of work. Can you review and let us know if there is any room to have a discussion?”
That should be enough to get the conversation started. I have more ideas on the next steps once they respond which I will post soon. The goal is to find the proper coverage level for your business. I recommend that you consult with an insurance agent to review your business to find out what that is.
I hope this helps. Thanks for reading. Click the heart if you liked it. I would mean the world to me.
— below is a video I did on this topic as well.
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