De-risking the Future of Work

David McFarland

coterie CEO presentation

Earlier this year, Coterie had the pleasure of presenting at Cintrifuse’s Tech Frontier Series focused on The Human Capital Challenge. Our contribution honed in on “De-risking the future of work”.

Insurance, an afterthought for most, is one of the most underrated business tools. At minimum, it is a requirement for any legitimate business. Not very exciting, but kind of like your back, you don’t realize how essential it is to your life until something goes wrong.  

In the case of modern workers, many of whom are knowledge focused, the person, the work, and the business all converge - and insurance is an important way to protect it all. This is where we can be an asset, as I’ll explain in this blog.

At Coterie, we use technology to provide immediate-access, flexible term business policies relevant to an emerging class of workers and business-owners:

  • Freelancers/contractors
  • Gig Workers
  • Entrepreneurs
  • Small business owners

The Emerging Freelance Economy

While the degree of skills and industries can range wildly between these types of workers, they share similar fundamentals, notably the desire to be in control of their own professional and financial destiny. For this type of worker, their personal finances are deeply correlated with that of their business/profession because they have to cover all the structural expenses of operating a business and paying for everything on their own dime.

It’s a difficult endeavor - workers are giving it a go themselves without the traditional safeguards that come with W2 employment.

Gig workers working several on-demand jobs or high-end consultants working select projects both share similar needs - to source their own “benefits” to provide for themselves and their families.

While making it work can be challenging, it is a preferred lifestyle for a large, and increasing pool of talented workers estimated at more than 25 million in the United States alone.

To support these folks, an ecosystem of startup businesses - like Coterie - have launched to make it easier for good workers to find jobs, manage their business, and protect their finances. This is possible because our systems can talk to each other through API (Application Programming Interface).

So this brings us back to “De-risking the future of work” and our role in that.

Freelance marketplaces are a primary channel partner of ours. From a technology perspective, they are a medium that uses data to connect people interested in work with people that need workers. Over the past decade, their use has skyrocketed with millions of projects running through sites like Upwork, Fiverr, and Freelancer.com. But more recently, niche players like Catalant - a marketplace of tens of thousands of “digital strategy professionals” - have quietly become the scene to pay attention to because of their focus and, therefore, scarcity in the realm of digital marketplaces.  

If I wanted to hire someone on a site like this, it would be no problem. To me, it’s just another transaction medium with its own terms. What I care about is transacting with a trusted medium and if anything goes wrong with the worker, there is clear reciprocity stated in our contractual agreement (usually through the terms and conditions you agree to upon registration).

But what if the worker makes a major error costing my business significant money? The marketplace isn’t going to help me with that by finding another worker. So I’m going to go back to the source.

Enter BigCo thinking. Their legal and compliance structures are challenging for those who want to try and work with them. If you’ve ever gone through a Fortune 500 procurement process, you know what I mean.

Right Place Right Time

Niche marketplaces like Catalant have raised a lot of Venture Capital money - in their case over $75 million from investors including Mark Cuban. The expectation is to pour on the growth. One way to do that is with large corporations who have the potential to be repeat, high-volume, customers.  

General Counsel at these marketplaces have a compliance problem impeding their growth - they can’t prove all of their workers have insurance policies, a requirement we are being told they must consider to close large deals.

To eliminate the issue, platforms want to make insurance a mandatory requirement. Unfortunately, they’re running into a problem with who will write policies, since many of the BigCo’s have specific insurance requirements, This makes things difficult since insurance carriers don’t have much incentive, or agility, to change their current insurance products.

This is an old industry problem we have an answer for.

Most carriers have a fixed determination of the policy types they will and won’t write. It’s a decision about risk. The problem for workers, though, is there are a select number of options for most business policies like General Liability, Professional Liability, and Businessowner’s (BOP). On top of that, the process is slow and clunky.

Different than most, Coterie has the ability to work with platforms to create the insurance solution they need for their marketplace and because of our API, we can embed our insurance application directly into their registration process.

Our capability is a solution that enables compliance for marketplaces with minimal effort.

By coupling insurance with the freelance marketplace the workforce benefits from a greater volume of transactions between talented employees and the people who want to pay them.

Ultimately our products can open up opportunities for both parties to focus on what they are passionate about - quality work. For the insurancey stuff, we’ve got you covered.

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