

Ask HN: Liability insurance: pay before reading? - jarrett

Should a liability insurance company make a startup pay a $1200 annual premium before letting you read the policy?<p>Background: I'm about to launch a bootstrapped startup, and the last big thing I have to do is get insurance.<p>I've been working with techinsurance.com. So far, they're the only broker that's even been willing to talk to a web startup with an unusual business model. They offered me a Beazley policy.<p>The problem is, they want me to fill out a couple "applications" and attach a check for the annual premium before they'll even let me read the policy. This means I've never seen a formal definition of my coverage. The applications specify a coverage limit in dollars, but that's only part of the story. If you've ever read an insurance policy, you know it's full of rules about what is and isn't covered, what circumstances would be excluded from coverage, and so on. That stuff really matters for a business. My business, in particular, has some unusual liabilities, and I'm concerned that they won't be covered by this policy I haven't seen.<p>In case you're wondering, the applications do not incorporate by reference any documents to which I have access. They refer to "the policy," but I've been told I'm not allowed to see the policy until I pay.<p>Forgive me for being a little naive about the insurance industry, but doesn't this seem backwards? I feel like I'm being asked to sign a contract I haven't read and buy a product I haven't seen.<p>Is this standard industry practice? Do I just have to bite the bullet and buy insurance without knowing what I'm really buying? Should I demand more disclosures? Or should I look for a different broker?<p>Thanks in advance for your thoughts.
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barlo
I can tell you that I used to work for a life insurance company that had
similar policies (no pun intended). The only way to read the actual policy was
to pay the initial premium.

They would issue the policy, and then the owner/insured would have a 15-day
"free look" period where the policy can be canceled and the premium refunded
in full.

Free look periods are part of state insurance law in the life & health
insurance world. I'm not sure if this also holds true for property and
causality, but I'd assume it does.

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techinsurance
Your note came to my attention. We are happy to provide a copy of the standard
policy language in advance of purchasing coverage. The standard policy
language may not match the policy that is issued to you exactly as your policy
may include specific endorsements that broaden or restict coverage based on
the exact coverages you request. In all cases, if the policy that is issued by
the insurance company does not meet your needs we are able to have the policy
cancelled and provide a full refund within 30 days of the policy start date.
We want you to be entirely comfortable doing business with us.

Jim Cochran TechInsurance

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brudgers
Your business model should not radically affect a general liability or
business owner's policy. $1200 a year doesn't sound like it would cover much
of anything unusual.

If it is just business owner's/general liability, I recommend calling a couple
of local brokers. Just about anyone can quote standard policies, and unless
you have product liability coverage or another unusual need, the prices will
all probably be close.

By all means avoid a broker who you are not comfortable with.

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Mz
If you are in the US, every state has a department of insurance charged with
looking out for the consumer. Contact them and see what they can tell you.

<http://www.naic.org/state_web_map.htm>

(or google "department of insurance (your state's name)")

