Interview with David McFarland, CEO and founder of Coterie Insurance

A look into insurance and what the company means by "commercial insurance as a service"

With many people out of work around the US and world due to the ongoing pandemic, some are turning to freelance work to help supplement lost income.

It has also put a spotlight on company-provided insurance and just the insurance space in general. It's something that all of us need - whether health, business, travel, etc - but many of us do not want to deal with it, as it can be a confusing, time-consuming process.

If you are a small business owner or freelance worker, insurance can definitely feel complicated, but the insurtech space is growing and looking to help with that. Coterie is one such company. By working with existing technologies and gig economies, it can streamline the process, while still providing the correct coverage.

I had the chance to talk to David McFarland of Coterie to learn a bit more about the company, how it works, and where the industry is heading in the future.

Check it out below.

Care to introduce yourself and your role with Coterie?

Certainly. I’m David McFarland, CEO and Founder of Coterie Insurance. 

What inspired the creation of the company?

I’ve been working in insurance for a long time, and I think it would be fair to say that technological innovation is not the industry’s strong suit. There are a lot of reasons for that, some of which have to do with the actual technical challenges involved, and some of which have to do with human challenges. 

In short, people typically don’t want to rock the boat, and that combines with the fact that, in insurance, rocking the boat is actually pretty hard. 

Still, I saw an opportunity to create actual efficiency - and a profitable business, that brings value to other businesses - in the insurance industry. So, I decided to build my own boat. 

In just a few sentences, what is Coterie?

We make getting business insurance easy, based on the assumption that most people don’t care about insurance, despite it being important and, in a lot of cases, legally necessary for businesses. 

We integrate seamlessly with a growing number of existing technologies that businesses already use - think points of sale, gig economy apps, small business software, etc - to offer insurance right where it’s needed, and when it’s needed. 

Because we integrate with the tools that businesses are already using, which have the data we need to sell insurance, we make buying insurance as easy as pressing a button. In addition to that, for freelancers who often don’t need an annual policy, we offer a flexible duration option that allows them to pay for insurance at the job-level (i.e. when they need it) and again, at the click of a button. 

Is your service meant for small businesses or is it more an enterprise solution?

At the moment, we’re more focused on small businesses and freelancers and have built insurance and technology solutions with them in mind. 

Can you break down how it all works? Say I'm a freelancer looking for basic, general liability insurance - take me through the flow from getting a quote to what happens in your system, etc.

Most freelancers are using freelance/gig marketplaces to find jobs that match their skills, which is exactly where Coterie comes in. 

We work with those marketplaces to create a fully integrated insurance solution that allows a freelancer to add insurance to any job they are taking through that marketplace without ever leaving that page.

They’ll see the cost of insurance for that job (or have the option to buy an annual policy) and can add it by simply checking a box when they accept that job.

You've described yourself as "commercial insurance as a service," what do you mean by that?

The term “commercial insurance as a service” refers to the fact that we have a fully integrated insurance solution for our partners. 

We give them the ability to add value to their customers by offering the most streamlined commercial insurance buying experience on the planet, right from their flow. 

Do you have any competitors in the space, and if so, what are you doing differently?

We do have a few competitors - companies like Next Insurance, Thimble, and Bunker. What we do differently is that we are focused on an ecosystem approach to insurance. We are focused on non-traditional distribution channels, leveraging data that already exists to make the insurance buying experience simple. 

Additionally, we build our insurance and our tech. Some companies prefer to hook into other outside insurers; other companies are reasonably good insurers, but lack the tech integrations we offer.

By owning both sides of the equation, we’re able to offer the best product and the best experience for our customers. 

Do you have any tips for small business owners and freelancers on ways they can protect themselves and their businesses?

Insurance is one of the best ways. Having the right business owner’s policy or general liability policy is extremely important.

Our agents can help you figure out what’s best. Feel free to give us a call. 

Where do you see the insurance industry heading over the next 10 years? Do you think things will remain the same?

The industry will continue to change. We’re already seeing insurance start to embed in what we’re doing (Root is a good example). I imagine this will continue to happen as we use more hardware and software to make our lives easier. 

It doesn’t make sense to have all of these disparate processes, insurance being one of the biggest ones. I imagine the industry will evolve into being integrated into the systems businesses are using. 

Anything you'd like to close with?

We’re at the beginning of an exciting time in insurance. There will be a lot of changes and a lot of neat ideas that come out. I think the consumers will end up benefiting greatly from this, especially since insurers will be able to price more adequately. 

This means that people who are really risky will be charged more and people who aren’t as risky will be charged less. What happens today is that we have less risky people being charged more than what is right, since it is hard to distinguish who is who from the data we have. By accessing new sources of data that are convenient to the customer, we can fix that. 

I'd like to thank David for taking the time to answer some of my questions regarding insurance and Coterie.