When we read stories about what makes a company successful, they’re usually told from the point of view of the business owner (we’ve even shared a few such stories ourselves). We thought it would be interesting to examine things from a different perspective, so we reached out to some operational suppliers to learn what value their products and services can add to a growing business.
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In this interview, we speak with Olivier Bue, Vice President of Commerical Lines at The Hull Group. The Hull Group is a boutique insurance brokerage with a speciality practice for small- to mid-sized privately held or publicly traded companies. They are completely independent with no ownership by or debt to insurance companies.
Their culture centres around advocating for client interests and they are committed to offering practical advice and insurance solutions that offer real value and balance sheet protection.
Tell me about The Hull Group and how you serve SMEs.
We are a boutique brokerage made up of 25-30 people. Half our business comprises small- to mid-sized businesses and the other half is personal insurance for high-net-worth individuals. I work on the commercial side of the business.
For smaller or early-stage companies we often work with founders and CEOs and for mid- to larger-sized companies, we tend to also work with finance executives or legal counsel.
Can you tell me about the different insurance considerations a smaller start-up might have as opposed to a more established company?
A common thread between start-ups and companies of up to 100 employees is that those types of clients want the insurance process simplified for them. They want us to take the pain out of it. At this stage, they want practical advice on what is necessary as they try to launch or grow their business. They don’t want to waste time or resources so we make sure we hit on the meat of what coverage they should be carrying.
Around the 100-person mark the needs of the company change. At $10m revenue, you need to think about insurance from a balance sheet perspective. Certain types of insurance are needed to ensure the company doesn’t get stuck in the mud due to an uninsured claim. When the company reaches 40-50 people, we often do contract review to ensure compliance.
Around the 100-person mark the needs of the company change…Certain types of insurance are needed to ensure the company doesn’t get stuck in the mud due to an uninsured claim.
Are there specific moments in a business lifecycle where insurance should be a priority?
That depends on the type of insurance. D&O (Directors & Officers liability insurance) has gone down in price over the past decade and this should be a priority—certainly once you strike a board or look at outside investment, but even when there are 3 or 4 founders. Disputes can happen, so even at $1-2 million revenue, D&O should be a consideration.
For a technology company, Errors and Omissions insurance is important right from the early stage. For B2C or B2B companies with sensitive information on their systems, cyber insurance is definitely important for personal data protection since the costs of a breach can be very significant.
From $0-$10m the insurance is usually contractually-driven. Property and general liability insurance are both straight-forward and you may just need to buy what your landlord or other contracts require. You want to work with an experienced broker because the contractual obligations might not make sense—your broker should be able to push back on elements that aren’t relevant or applicable.
Sometimes, based on the business model or services you provide to your customers, you might not need certain types of insurance—for example, certain elements of cyber insurance may not be as relevant. Your broker should be able to offer practical advice on what types of insurance your company does and does not need.
Insurance is one of those operational things that founders tend to neglect. What is the downside of this?
From my perspective as a broker, you need to be sensitive to the fact that, for many companies, insurance isn’t a priority during the start-up phase so we need to focus on the basics. With founders that aren’t engaged on that level, you need to be straightforward and to the point.
The best clients understand what they are and are not paying for. They see value in what they are buying. We have a client that develops mobile broadcast systems. They had a big contract to build a series of systems overseas. They were often late in getting cargo insurance for any expensive shipments. Understanding the nature of this client, we proactively decided to get them a $1 million blanket policy because they rarely think to call ahead of time. In this instance, their cargo was involved in a train derailment before it even reached port. The loss of that cargo and the project would have likely put them under.
Small- to mid-sized companies not buying D&O (which usually includes employment practices liability) can be an issue. If there is an employment claim against the company, it can really affect the business.
What is involved in getting the right protection?
It really varies based on the products and the business. Property insurance, D&O, and Errors and Omissions can often be done over the phone. The biggest time commitment is finding the right broker, then they should be doing the work on your behalf. The broker should be vetted and have credibility.
Often you don’t know if you have a bad broker until you find out they didn’t offer you something you need. Just make sure that whoever you are dealing with has the right qualifications and that they know your sector and your industry, and are able to speak to the relevant aspects of your business. Look for brokers that have clients in the sector that your business is in. Ask for recommendations from your peers. Ask them some questions around your business—do they understand your model?
The biggest pain point of insurance is that it can be totally confusing. A good broker should be able to simplify the process and provide practical advice.
Look for brokers that have clients in the sector that your business is in. Ask for recommendations from your peers. Ask them some questions around your business—do they understand your model?
Is there anything else you would like the reader to know?
Starting with a broker can be a leap of faith, so do some homework. Talk to a few brokers and get a feel for who you are comfortable with. 9 out of 10 brokerages are either owned by or in debt to an insurance company, which influences their choice of insurer. The Hull Group is an independent brokerage. We have no ownership or debt to insurance companies. We work for clients, not insurance companies and we are 100% focused on client interests. Our value proposition is advice. We make our money through insurance products but we are successful because we have given good advice for a long time.
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Learn more about what The Hull Group offers on their website — https://thehullgroup.com/
You can reach Olivier directly at (416) 865-2108 or (416) 865-0131, or connect with him on LinkedIn — http://ca.linkedin.com/in/olivierbue
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At BeachHead, we are passionate about helping businesses scale up from a strong Operations foundation. The BeachHead Organization Audit (BOA) helps founders evaluate their business through an objective lens. Our BOA scorecard allows us to evaluate all aspects of a growing business so we can recommend changes based on what the organization wants to accomplish in the next phase of growth.
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