What Startups Can Learn from the Insurance Sector

There are over 63 million MSMEs in India, yet 75% of them view insurance as an unnecessary cost. If you're a founder or part of a growing business, ask yourself this:

Are you building protection into your business plan, or leaving it to chance?

Let’s break down why so many MSMEs hesitate to buy insurance, and what startups can learn from the insurance sector itself.

Why MSMEs Hesitate to Insure

1. Lack of Awareness Most startups and MSMEs don't fully understand how insurance works or what it covers. Many see it as an added expense rather than a long-term safeguard.

2. Limited Accessibility Businesses in Tier 2 and rural areas often lack access to reliable insurance providers, widening the gap between risk and protection.

3. Misconceptions About 30% of MSMEs believe they’re “too small to insure.” Some worry about claims settlements or assume premiums outweigh the benefits.

But that’s not the full picture.

How to Approach Insurance Smarter

→ Educate Yourself: Understand the risks your industry typically faces, be it cyber threats, liability, or employee health. Awareness is your first line of defense.

→ Do Your Research: Look into what your peers are doing. Compare different policies and coverage types. The right insurance plan is one that’s tailored to your business.

→ Explore Your Options: Connect with insurance professionals who can help assess your risks and recommend relevant products. Don’t guess, ask.

What Startups Can Learn from Insurers

The insurance sector doesn’t just protect businesses; it teaches how to build resilient ones. Here’s what insurers do that startups can adopt:

• Risk Management: Identify potential threats early. From operational hiccups to cyberattacks, insurers assess risk before it becomes a loss.
• Business Continuity Insurance companies insure themselves, too. It’s not about fear, it’s about bouncing back fast when things go wrong.
• Financial Stability Insurers use insurance to show they’re risk-aware and investor-ready. So should you.
• Employee Protection: Health and accident insurance help insurers retain top talent. For startups, it signals care and credibility.
• Peace of Mind With protection in place, leaders can focus on building without being blindsided by setbacks.
• Tailored Solutions Insurers don’t use one-size-fits-all plans. You shouldn’t either. Find policies built for your size, goals, and risk profile.
• Knowledge Building Insurers stay informed about market trends and emerging risks. As a founder, staying curious and updated is key.
• Built-in Resilience Insurance is about long-term vision. It’s about protecting the business you’ve built and the one you’re yet to build.

Final Word

Startups often overlook insurance while chasing scale. But the smartest founders know that growth without protection is growth at risk.

At Shift Risk, we help you make informed choices. No jargon. No pressure. Just policies that work for your business.

Tick one thing off your startup checklist today. Visit www.shiftrisk.com to secure your business.

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