What Will You Give Up For Your Startup?(battlehardened.wordpress.com)
battlehardened.wordpress.com
What Will You Give Up For Your Startup?
https://battlehardened.wordpress.com/2012/02/10/what-will-you-give-up-for-your-startup/
13 comments
I just got done talking with a friend who is an underwriter. Your underwriter is clueless. Go elsewhere.
A mountaineering rider will cost you $2.50 - $7.50 per thousand dollars in coverage.
A mountaineering rider will cost you $2.50 - $7.50 per thousand dollars in coverage.
I'm speculating that the difference between the rock climbing and your partner smoking is that lung cancer doesn't usually kill people without warning. It can take months or even years (there are exceptions, of course).
That would give the company plenty of time to find another key man (and the insurance company plenty of time to cancel the key man insurance). Rock climbing deaths tend to be of a more sudden nature.
That would give the company plenty of time to find another key man (and the insurance company plenty of time to cancel the key man insurance). Rock climbing deaths tend to be of a more sudden nature.
Nah, without evidence I propose that it's simply that smoking is so common, allowances are made. If every key-man insurance policy prohibited smoking, too many deals would fall through and the insurers wouldn't have any business. Rock climbing is just more esoteric and therefore easier to put a "NO" to.
In that case... Do you then need the nsurance?
I'm not too familiar with the intricacies of insurance but what would happen if you were to continue rock-climbing and mitigated your risks (by climbing in a gym with toprope and a partner, etc.) such that you were never actually fatally injured while climbing?
What's the risk there-- that some sort of injury actually does happen, you're forced to reveal your hobby, and you'd be held personally liable/leave yourself open to prosecution for negligence? Or would your premiums just increase whenever the truth came out?
Sorry to speak in such negative hypotheticals, but I'm just genuinely curious about what the terms of "giving up" something for insurance entails.
What's the risk there-- that some sort of injury actually does happen, you're forced to reveal your hobby, and you'd be held personally liable/leave yourself open to prosecution for negligence? Or would your premiums just increase whenever the truth came out?
Sorry to speak in such negative hypotheticals, but I'm just genuinely curious about what the terms of "giving up" something for insurance entails.
Well, knowingly lying on an insurance application is a crime even if that lie doesn't cost the insurance company anything.
If you have a hobby like this, allow additional time and energy and get insurance quotes from several carriers. Something like snowboarding is (or used to be?) treated seriously by some insurances and not by others. I don't know how dangerous rock climbing is, but it seems kind of similar--the kind of things that some will use to increase premium and some might ignore.
Given the circumstances, no doubt you (OP) made the right call, given the timing of the deal. But you could still might be able to find and switch to a more permissive/equally-good insurance policy down the line at some point. Might take a couple years to get this done, of course.
Given the circumstances, no doubt you (OP) made the right call, given the timing of the deal. But you could still might be able to find and switch to a more permissive/equally-good insurance policy down the line at some point. Might take a couple years to get this done, of course.
I can quote fatality figures at you, but I'm afraid I can't transform that into useful statistics. For the most part, you have a lot of control over your level of acceptable risk in climbing. If you want to top-rope in the gym with a sober partner, you experience a much greater hazard driving to the gym than actually climbing. Free-soloing El Cap in the nude is another story. The estimates I've seen find the risk of serious injury to be far less than that of playing high school football.
In most of the insurance policies I've seen, payout is typically refused for fatalities over 6000m or 7000m. While I haven't purchased key person insurance, I've never had a problem with buying a hazardous activity rider.
Are you sure you did enough shopping around?
Edit: For any climbers in the audience, I'd like to encourage you to join the American Alpine Club. (http://www.americanalpineclub.org/benefits/)
In most of the insurance policies I've seen, payout is typically refused for fatalities over 6000m or 7000m. While I haven't purchased key person insurance, I've never had a problem with buying a hazardous activity rider.
Are you sure you did enough shopping around?
Edit: For any climbers in the audience, I'd like to encourage you to join the American Alpine Club. (http://www.americanalpineclub.org/benefits/)
Rock climbing will always give you a rating (bigger premium) if you do it with any kind of frequency. Snowboarding, while somewhat dangerous, is not as deadly and the underwriting has adjusted.
Don't even mention rock climbing in your insurance application. At my last company we got key man insurance on one of the founders. He had done rock climbing in the past and might do it in the future, but it had been 3-4 years. Nonetheless he included it on the list of activities the questionnaire asks about. Next thing you know a simple process was drawn out over months and his premium was higher even than a smoker.
Your insurance questionnaire being more detailed had nothing to do with who was the beneficiary of the policy (think about it - why would they care who gets the money), but the fact that the death benefit was probably larger than anything you would have applied for individually until now. The level of detail underwriters go into is almost always 100% dependent on the size of the cheque they have to write upon ones death.
If you took out the same size insurance policy individually from the same company, the questionnaire would not have been any different.
If you took out the same size insurance policy individually from the same company, the questionnaire would not have been any different.
I've thought about this before as well. My "hobby" has been computer gaming as long as I can remember. I'm not doing a startup right now, but when I have, the time demands required me to make a choice. It sounds silly, but in reality we all find it difficult to walk away from something that's a major part of your identity.
The trick is to find a way to feed the part of your psyche that wants that activity / etc., maybe a substitute without the same drawbacks. Hiking instead of rock climbing, or chess instead of computer gaming. Virtual methadone...
The trick is to find a way to feed the part of your psyche that wants that activity / etc., maybe a substitute without the same drawbacks. Hiking instead of rock climbing, or chess instead of computer gaming. Virtual methadone...
I've got a similar problem; I've an avid rock climbing and alpinist too, and used to be an alpine instructor as a hobby. I had to give that last one up, due to liabilities: when a person I give training to makes a deadly mistake, gets disabled, etc, the chances were too big some for some liability lawsuit to occur.
It's a pity these things happen. Thank god I didn't have to give up rock climbing altogether yet. I don't know whether I could make such a choice (since both are enormous passions in my life).
It's a pity these things happen. Thank god I didn't have to give up rock climbing altogether yet. I don't know whether I could make such a choice (since both are enormous passions in my life).
I'll give up anything except my health, relationships, and sanity. If I don't make it, there's always Zen meditation to soothe my mind :)
Now that you've sold your startup you could climb again, right?
I've heard a good break can bring your skills to the next level!
I've heard a good break can bring your skills to the next level!
Brutal.. Maybe you could do some bouldering just for that taste
Actually tried the bouldering angle. The underwriter had even less experience with bouldering than with rock climbing. When I explained it -- no ropes, no gear, just a crash pad -- the underwriter freaked and wouldn't consider insurance even at a higher premin!
Is there a height at which "bouldering" becomes "rock climbing"? It's probably defined in the insurance contract somewhere.
"So I caved"
Heh.
That's a bummer. Are you going to take something else up instead?
Heh.
That's a bummer. Are you going to take something else up instead?
Based on that post - he could always take up Spelunking.
All I can say is Wow. You really needs to come back down to reality. It's great you 'saved' your company by not rock climbing, but blogging about it is a bit much. I'm not saying this to be mean, but the article is off-putting.
Well, ok downvoters, exactly what did you get from the article that I'm missing? Or is it simply that you know the author personally? This is a serious question.
Rather unfortunate, luckily i don't rock climb but i'm sure we all run into these things!