Don’t Sleep on Insurance: It Might Just Save Your Platform

Apr 7
3 min read

From Chapter 7 of Bulletproof Your Marketplace

Let’s talk about insurance—yeah, I know, not the sexiest topic in the startup world. But if your eyes glaze over every time someone brings up coverage limits or policy language, I’ve got news for you: you’re missing a huge opportunity to protect your business.

In Chapter 7 of Bulletproof Your Marketplace, I break down the critical—but often misunderstood—world of insurance for marketplaces and digital platforms. And I do it without putting you to sleep (you’re welcome).

Here’s the truth: most founders treat insurance as a checkbox. Something you get because your board tells you to, or because an enterprise partner demands a certificate of coverage. But if you treat it as a formality, you’re not protecting your platform—you’re gambling with its future.

Insurance Isn’t a Product. It’s a Risk-Sharing Strategy.

When you scale a platform, you take on risk. That’s unavoidable. But the smart play isn’t to avoid risk altogether—it’s to design a strategy that transfers it.

That’s what insurance is: a way to shift catastrophic financial risk off your balance sheet and onto a carrier’s. Done right, insurance can be the thing that saves your business when all else fails—after a lawsuit, a safety incident, or a major operational failure.

But to do that, you need to be intentional. You can’t just buy an off-the-shelf policy and hope for the best.

Every Platform Needs a Custom Coverage Strategy

No two marketplaces are the same—and your insurance program needs to reflect that. In this chapter, I walk you through the key types of coverage that digital platforms should consider, including:

Commercial General Liability (CGL) – Covers bodily injury and property damage claims
Technology Errors and Omissions (Tech E&O) – Covers claims arising from platform failures
Cyber Liability – Covers breaches, hacks, and privacy violations
Directors and Officers (D&O) – Protects your leadership from claims related to company management
Employment Practices Liability Insurance (EPLI) – Covers employment-related claims like discrimination or wrongful termination
Workers’ Compensation – Required if you have employees
Excess/Umbrella Coverage – Provides higher limits on top of base policies

For some platforms, you might also need platform-specific policies—like rideshare, home-sharing, delivery, or on-demand labor insurance. If your users are operating in the real world, your exposure is higher—and your insurance needs to match.

You Can Negotiate Insurance Terms

One of the biggest misconceptions I hear is that insurance terms are non-negotiable. That’s just not true.

In fact, negotiating your policies is one of the most important things you can do—especially around:

Definitions of covered activities (does it include your full platform model?)
Exclusions that might gut your protection (watch for IP, third-party vendors, or contractual liability exclusions)
Coverage triggers (do you have to be sued to get coverage?)
Defense costs (are they inside or outside the coverage limit?)
Deductibles and self-insured retentions (SIRs)

This chapter gives you the vocabulary and context to ask the right questions, push back on red flags, and work with brokers who actually understand your business.

Insurance as a Growth Enabler

Here’s the twist most founders miss: insurance isn’t just about protection—it’s about permission.

If you want to:

Partner with enterprise clients
Expand into regulated industries
Raise capital from institutional investors
Operate across borders

…then you’re going to need insurance. The right coverage gives your partners, users, and investors confidence. It says, “We’ve thought through our risks. We’re serious. We’re safe.”

And when the inevitable happens—whether it’s a slip-and-fall, a data breach, or a class-action threat—insurance can keep you afloat long enough to fight another day.

Insurance ≠ Immunity

Let me be clear: insurance does not replace trust and safety.

You can’t rely on your policy to clean up problems you could’ve prevented. If you’re not investing in risk management, your premiums will skyrocket—or you’ll get dropped altogether. And if you misrepresent your business, you might find your policy doesn’t cover you at all.

Think of insurance as your last line of defense—not your first.