Simplifying Small Business Insurance

Coterie website.

Every business should get business insurance, but this can be easier said than done if you’re just starting out. A lot of insurance companies have given up selling insurance to small businesses because there’s so much work involved that they can’t make a profit. Coterie is an insurance manufacturer that’s making it much faster and easier to apply for business insurance. This is Coterie’s origin story.

Data Problems Everywhere

David says he got the idea for Coterie while working at his first job as an actuary for the National Council on Compensation Insurance. “I was just dumbfounded with all the data problems that we had,” he says. “And I was just like, ‘All we need to know is [the] business name.’ Really, what we need [for] workers comp is what people are doing and how much they’re getting paid.” David knew that all of this data could be found in human resources and payroll systems, and yet he and his colleagues were “still filling out forms and faxing [them] to people.” Plus, the numbers they were sending were often incorrect.

All of this resulted in inefficiencies and associated costs that could be avoided through automation, with the savings passed on to customers. David went into actuarial consulting, and I tried to help insurance companies implement his ideas. “They had huge tech debt, systems built on mainframes, and all this stuff that they couldn’t just layer APIs on top. And so I was like, ‘Look, I can’t get there from here.’ So I basically had to change it up and say, ‘All right, I’m going to do this. I’m going to start my own company.’”

Making the Process Faster and Easier

According to David, some 50% of small businesses are uninsured. To address this issue, Coterie focuses on “enabling the insurance distributors with … speed, simplicity and service so that they can actually make a profit off of selling small business [insurance].”  

To accomplish this goal, Coterie requires much less data – often just a business name and address – but still offers insurance policies complete with coverage recommendations and endorsements that the applicant needs to match. According to David, Coterie’s average time to produce a bindable quote is two minutes and 45 seconds. 

How does the company do this? It turns out through internet searches that you can glean about 3,000 pieces of information quickly from just a company name and address, such as what the company offers, sales data, the number of employees, company reviews, etc. Armed with this data, “[W]e actually can understand what’s going on” at a company, he says. “Do we have it appropriately classified? Do we understand the exposures? And that level of data that we get is frankly much more exhaustive than what you’re going to put on an insurance application. And no offense to agents or brokers, but it’s also much more truthy … because we can’t expect the agents and brokers to put in [perfectly] accurate information about sprinkler and fire hydrant, what the building’s made of. The owner doesn’t know that.”

What’s Next for Coterie, Advice for Founders

This year, David says Coterie wants to make its product even more convenient to use. “We’re going to be really improving a lot of efficiencies and just making delightful ads to the product,” he says. “And then towards the end of 2023, you’re going to see more expansion into workers’ comp. We’ve actually launched workers’ comp in a very small way, just testing it internally, basically, but it’s live. We’re going to expand that to our partners more broadly in 2023.” 

If David has one piece of advice for early-stage entrepreneurs, it’s to focus on the long term. “Do the things that are short-term negative, long-term positive,” he says. “So many times, people want to do things that are short-term positive but end up being long-term negative … [T]he people who continue to compromise and do this and that in order to shortcut their way forward, they don’t get the long-term benefits of truly great businesses.”

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