Bunker: A New Platform Innovates Business Insurance for Self-Employed/Gig Workers

The emergence and expansion of the so-called gig-economy (the non-employee, project and task-based segment of the labor market) has opened up challenges for both businesses and workers.

Businesses previously vigilant about the classification and other compliance risks that come with self-employed, 1099s/independent contractors (ICs) are now faced with the dilemma of how to work with the growing population of much-needed talent that prefers self-employment and independence. And self-employed workers and micro-businesses are also facing the challenge of how to “make independence work” without the “support services” that employees never have to think about.

Over the past two years, new solutions like MBO Connect (classification and compliance), Intuit’s QuickBooks Self-Employed (financial and tax management) and Stride Health (access to and management of healthcare) have come on the scene to both support self-employed workers and to make it easier for those workers and businesses to engage with one another.

Enter Bunker

Bunker launched in November 2015 and seed-funded to the tune of $2 million in the spring of 2016, and it has begun filling a gap that is a problem for businesses and self-employed workers alike.

Many businesses require that their independent contractors are covered by all or some of the following forms of business insurance: general liability, professional liability, worker’s compensation, auto liability, crime and even cyber liability. However, businesses often do not know how to structure suitable insurance requirements in a world where one size does not fit all.

But perhaps more importantly, for self-employed workers, it can be a complicated and time-consuming effort to meet those requirements (which can vary from company to company) and obtain the necessary policies and coverages. The broker-based distribution channels for business insurance are not optimized to serving the new wave of independent contractors. The process can be such a barrier that self-employed workers will decline a gig, in which case both the business and the contractor lose.

Bunker offers a highly innovative approach to this problem — one that benefits both workers and businesses. One, it provides efficient purchasing of suitable insurance products designed for self-employed workers. Workers can secure these policies within a time frame that can range from 15 minutes to a couple of days (compared to traditional brokers, which can take as long as two weeks). There is an additional benefit to workers, which is to have online visibility into their own policies and coverages and related information.

Businesses are also provided with a platform that, one, supports their specification and organization of appropriate required coverages and the tracking and management of worker compliance and, two, extends the option of purchasing Bunker’s insurance policies online to their self-employed workers. Note that independent contractors can also upload their own proof of insurance documents when they do not buy through Bunker.

In addition to the above, both businesses and workers benefit from unprecedented transparency into the insurance process and much reduced time-to-hire.

Companies can use the Bunker platform at no cost. Bunker earns revenue by charging a commission on policy sales. Contractors pay a commission that is no different from what they would pay a traditional broker (or even directly through a carrier), but they enjoy a range of benefits, from suitable policies to much easier and faster policy purchasing and coming into compliance with their clients.

Just Getting Started

Two of Bunker’s three founders have roots in the insurance industry. One of them is CEO Chad Nitschke, with 15 years of insurance industry experience (with Travelers, CUNA Mutual and AXIS). We had a chance to talk with Nitschke recently about the company and what’s in the hopper.

Nitschke told us that at this point the company is developing relationships and serving on-demand platforms, MSPs, independent contractor management firms, as well as enterprises. Bunker is currently providing self-employed workers and micro-businesses with standard forms of business insurance sourced from partner carriers. Bunker is also starting to develop its own innovative policies, with the first launched quite recently.

According to Nitschke, Bunker is also building its own “usage-based” business insurance policies specifically for independent contractors. Traditional insurance products are designed for Main Street businesses, he said, not the growing population of independent workers.

“The new usage-based business insurance programs allow for workers to easily tailor coverage to the length of their engagement, and only buy insurance for exactly what is needed. It's easier, more affordable, and ultimately designed specifically for their needs,” Nitschke said.

He added that “the first of those usage-based insurance products, launched in late 2016, is designed to protect ICs against work-related injuries. It has been popular with on-demand marketplaces as it addresses the workers compensation requirement that many enterprises have. Unlike workers’ comp insurance, which is designed to protect W2 employees, the new product developed by Bunker is specifically built for independent contractors and is backed by a leading A-rated insurer.”

Bunker is also building more usage-based business insurance policies for ICs, with the next one launching in a few months. In effect, it is only the beginning.

Why Do We Care?

Contingent workforce management procurement practitioners should take an interest in Bunker for a number of reasons. First of all, Bunker (and other companies) are forming an enabling support services ecosystem that will increase the viability of the independent way of working. This means that tapping the increasing population of independent talent is becoming more realistic. It also means that sourcing independent, self-employed workers will not need to account just for the talent itself, but also the ecosystem of supporting services accompanying the worker.

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