Insurance group Berkshire Hathaway has launched a comprehensive small business insurance product that combines multiple coverages, and the chairman of the legendary conglomerate has approved it.
The product, called THREE, is three pages long and incorporates worker compensation coverage, multiple liability coverage (including joint liability, tort and negligence, and cybernetics), property, and automobiles, according to the product release. THREE is rolling out nationwide as Berkshire Hathaway has received regulatory approval and is temporarily viewable at threeinsure.com.
Berkshire Hathaway Chairman Warren Buffett praised the new product in a company statement.
“Insurance is essential protection for any business, but few small businesses have the time to read the policy forms that are supposed to protect them,” Buffett said in a prepared note. “With THREE, small businesses can be confident in the protection they receive because the entire policy can be read in minutes.”
One analyst said the product had potential as a direct channel despite the expected slow start.
“Although direct channel penetration tends to be slow (as is the case with private cars), today we expect some weakness among competing small commercial insurers and brokers,” said analysts Meyer Shields and Sean Reitback of Keefe, Bruyette & Woods IM February. 11 Notes.
According to Berkshire Hathaway, the product responds to the fact that small businesses usually need some type of insurance to protect their interests. To that end, the company says, organizations typically get multiple, unrelated policies that can span dozens of pages.
THREE is billed as a more efficient alternative that can be purchased in one place and is also available directly to small businesses, eliminating the need to involve intermediaries or third parties. By combining coverage, Berkshire Hathaway says small businesses can minimize the risk of not knowing what is covered and what individual policies can be applied.
Berkshire Hathaway’s new coverage could generate a pretty strong response. An Accenture study, released in late 2018, concluded that business owners were frustrated with the process of obtaining business insurance, a process they described as “striking”, “confusing” and “unpleasant”. Among the results: Small business owners want a simpler and easier buying process than they have today.
Berkshire Hathaway itself focuses on small business customers in other areas. The biBERK toolkit, for example, allows small business owners to shop online for commercial vehicles, general liability, property, and workers’ compensation insurance, among others.
Berkshire Hathaway said it would use a licensed agency to assist with DREI reporting.