When Insurance is a Barrier to Business

For many independent contractors, the following frustrating scenario is all too familiar: you’ve checked off all of the requirements of a contract for a fantastic gig and waiting for the final approval, only to be told you’ll need different levels of liability insurance to solidify the deal. For hiring managers, a similar scenario often unfolds: your on-site contingent workers are carefully selected ready to work, but must be turned away at the door because the staffing firm’s business insurance expired the day before. These are just two examples of the ways in which insurance requirements can become a barrier to accessing talent and advancing your business. In this blog, we take a closer look at how Bunker, a nextSource channel partner, is taking an innovative approach to help companies overcome insurance as a barrier by combining insurance and technology.

The contracting process has many moving parts, business insurance being one of them. Bunker’s software allows firms with insurance requirements to store and share them with partners in the contracting process. This allows the partner (often a staffing company or independent contractor) to understand the exact insurance coverages and limits required. If the partner already has insurance, they can upload a certificate (COI), which Bunker screens on behalf of the requiring firm. If the partner needs additional insurance or doesn’t currently have insurance, Bunker is a licensed insurance broker and can quickly provide the necessary coverage.

Working with global insurance carriers, Bunker has built new insurance products and technology integrations to provide value for you and reduce insurance as a barrier to common contracting challenges. The technology integrations allow common coverages (and a continually growing portfolio) to be quoted and purchased on their website, dramatically improving the experience and speed. On the insurance product side, many staffing firms and independent contractors have annual insurance policies for their highest contract requirement, even if the contract is for less than a year. This makes the economics difficult, particularly for independent contractors, often causing small suppliers to reject contracts. Bunker’s Usage-Based Insurance was created to break down this barrier. Usage-Based Insurance means acquiring the proper amount of insurance and only paying for the term of that contract. It seems logical, but it’s actually the first-of-its-kind in the small business insurance industry.

To paint a clear picture of how usage-based insurance impacts different types of businesses and their insurance experience, we provided three different customer examples. These are meant to be examples, and specific experiences might differ based on other customer and contract information.

Meet Brandon, a graphic designer and digital media consultant. He typically has three to four short contracts going at any one time, pulling in an average of $130,000 per year. Brandon typically works remotely for these projects, which companies require General Liability ($1 million limit) and Professional Liability ($2 million limit). Brandon can select the coverage and limits he needs, select the desired policy length (ex. three months) and purchase online.

Meet David, an information technology consultant. He was contracted to implement a new cloud system at a large corporation. His typical annual income is around $185,000 and his work is on site at the client’s location. The client sent David a link to buildbunker.com that shows him exactly what they require: General Liability ($1 million limit), Professional Liability ($2 million limit) and Cyber Liability ($2 million limit). David can select the desired policy length (ex. three months) and purchase the General Liability ($1 million limit) and Professional Liability immediately. For the Cyber coverage, a licensed insurance advisor will contact David and provide quotes for him to review within 3-5 business days.

Meet Contractors R’ Us, a healthcare staffing firm that leverages Bunker as its corporate insurance broker for General Liability General Liability ($2-4 million limit), Professional Liability ($5 million limit) and Worker’s Compensation. They also leverage the free software to manage insurance certificates. When placing workers at healthcare systems, Contractors R’ Us accesses the Bunker website that shows them exactly what is required for their contract become compliant. After the online purchase, the COI is automatically available in their profile for safe keeping and everyone is protected.

By providing a simple way to share insurance requirements and manage certificates, along with building flexible corporate insurance products, nextSource and Bunker aim to reduce contract complexity and create more favorable contract economics, while preventing insurance from halting a work mid-project. Read more about Bunker in their Forbes article here.