Bunker launches modern solution to insurance fraud and noncompliance

Madison startup is bringing proof of insurance into the 21st century, with real-time visibility into active insurance policies, instant compliance notifications, and unlimited sharing and storage.

Insurance isn’t the most exciting topic, at least in part because many of the things we’re familiar with about insurance are still rooted in the last century.

Bunker, an “insurtech” startup with offices in San Francisco and Madison, is attempting to change the way working professionals look at insurance with the creation of real-time proof of insurance that fits the dynamic nature of the on-demand workforce.

Until now, certificates of insurance have largely come in the form of paper or PDF documents, which are difficult to track, easy to fabricate, and the data is static. What makes Bunker’s Live COI different, according to CEO and co-founder Chad Nitschke, is that it instantly reflects changes to an active insurance policy, notifying the certificate holder when a contractor’s policy is changed, canceled, or expired. Members can also build insurance requirements in the Bunker platform, share them in one click with contractors, and easily track at scale whether or not those requirements have been met from a compliance dashboard.

“One of our team members coined the phrase, the future of work is tomorrow at 8 a.m., and it’s true,” notes Nitschke. “The future of work is here, but the insurance industry is still operating on centuries-old processes.”

Bunker has so far raised over $10 million in venture capital and, according to Nitschke, helped thousands of freelancers, gig workers, contractors, and small businesses with insurance that’s compatible with the new way of work.

The young company, launched in 2015, is also committed to growth in Madison.

“Today we have 30 team members, and all but three of them are in Madison,” says Nitschke. “We have a freshly designed office on State Street on the third floor of the Comedy Club building, and we’re in the final stages of finishing a build-out of the space adjacent to our office, so we’ll be almost doubling our square footage next month in preparation for that level of team growth over the next 12 to 24 months. We have ambitious plans. The small business insurance market in the U.S. alone is over $100 billion annually. While we’re proud of what we’ve accomplished, in many ways we’re just getting started and have so much left to do.”

Disrupting the insurance industry

Nitschke’s background is in the traditional insurance industry, but his frustrations drove him to launch Bunker with Dan Feidt, head of product design and co-founder, after the two were introduced by a mutual friend, Kevin Kiser, who later joined the team as head of client solutions.

“In one of my last roles at a larger Bermuda-based insurer, I had the responsibility to figure out what the next generation of their small business platform should be,” recalls Nitschke. “While it was a great opportunity, it was difficult to drive the type of change I felt was necessary inside of a traditional incumbent. Living in San Francisco, I was exposed to innovation in almost every other industry and had also started making investments in startups, but insurance was clearly a laggard.

“To me it was obvious — insurance is a $5 trillion industry that hasn’t seen much change for decades,” he adds. “It was ripe for improvement and customers deserved better. From my perspective, if I didn’t make the change then, I would miss the window — I wouldn’t have the same type of opportunity to change the industry five years from now as I had then.”

According to Nitschke, a certificate of insurance is traditionally a PDF document showing proof of insurance. It includes important information about a business’s insurance policy (i.e., coverage, effective/expiration dates, limits, policy numbers, etc.). As the economy shifts to fluid, contract based relationships, it’s important that both parties are protected if anything should go wrong. However, because the insurance industry hasn’t kept up with the pace of change, up to 40 percent of independent contractors are noncompliant at any given time. In many cases, this leaves the enterprise and contractors exposed to damages, even if they have a seemingly compliant COI on file. Nitschke says the Bunker Live COI makes it possible for the future of work to be agile and innovative without sacrificing protection.

“Decades ago, a company created the standard for certificates of insurance with a paper or PDF form,” explains Nitschke. “In most cases, it traditionally works by a person filling in all of the data on that form, then emailing it to the contractor/small business, and they in turn email it to the organization requiring proof of insurance. That person then has to review/track it and oftentimes there are errors, so they go back and forth between all parties trying to resolve it.

“Surprisingly this process has to be repeated each time proof of insurance is required,” Nitschke notes. “While there isn’t data readily available, we estimate it's well into the billions of data points each year for proof of insurance that are shared via PDF. That’s literally years of unnecessary work. It’s extremely inefficient with a high error rate, not to mention a preponderance to fraud. While I don’t believe in absolutes, in this case I think it’s fair to say that virtually everyone hates the certificate of insurance process as it exists today. It’s a problem that needed to be solved.”

The first part of Bunker’s solution was to eliminate the need for a PDF document entirely. The Bunker Live COI is 100 percent digital, meaning with one click, a user can share their Live COI with anyone instantly from their account. The information is accurate, real time, and the recipient is able to see if their insurance changes.

“It’s the way the process should work,” says Nitschke. “We eliminate friction, fraud, and errors. Most of all, we’re saving people hours of time, and that’s often hours of time for just one transaction. When you scale that across thousands or even millions, it’s effectively months or years of time that can be now be spent on things more fun than insurance.”



Live COI is fairly industry agnostic, notes Nitschke, though some of the more common industry applications are in contingent staffing, procurement, on-demand/gig, construction, franchising, real estate, financial institutions, and health care.

“It’s ultimately relevant for any contractor or small business that needs to show proof of insurance, and/or any company that requires liability insurance of companies or contractors they work with,” Nitschke explains.

The platform also makes it easy for independent contractors and small businesses to update their Live COI and share instantly with unlimited certificate holders. This process can be slow and full of friction with traditional insurance providers, sometimes resulting in errors or even fraud. A common type of insurance fraud is failing to add an additional insured, a problem that can likely be solved by making it free and easy to do correctly. Bringing speed and transparency to both sides of the contract allows business relationships to start off on the right foot and stay protected throughout.

“We’ve spent a lot of time focusing on the gig economy, and while it isn’t the only area that can benefit from Live COI, it’s certainly a significant one — not to mention it’s growing quickly. Independent (gig) workers oftentimes have to show proof of insurance to the on-demand platform they are working on, and possibly even the enterprise they are providing services to. It’s not uncommon for on-demand platforms to have thousands or even tens of thousands of independent/gig workers.

“Compliance is critical, particularly if the on-demand/gig platform is selling into the enterprise (i.e., providing workers to large companies),” Nitschke adds. “The Live COI gives those independent workers a simple way to share proof of insurance, and the on-demand platforms can now easily track compliance in real time and at scale.”

Sweet home, Madison

Nitschke’s Madison connections were influential in why Bunker opened a local office. While he grew up in North Dakota, Nitschke lived in Madison between 2010 and 2011 when he worked for CUNA Mutual. “When I first took the job at CUNA Mutual, I heard from countless people about how much they loved Madison. Shortly after moving there, I realized why that was — the city punches above its weight class on almost every level.”

While he and his wife ultimately moved to San Francisco, they maintained their love for the community (his wife graduated from UW–Madison). “When I started Bunker with Dan Feidt — he was originally from Wisconsin — we decided early on to put more of the team in Madison for two primary reasons. First is the obvious: the cost of labor and real estate is much more affordable than in San Francisco.

“The second reason is even more important, in my opinion,” Nitschke continues. “I believe there is a talent arbitrage to be had in Madison and similar Midwestern cities. You have a very talented and educated workforce, but not the same competition for talent as in some of the coastal cities. It would be difficult for Bunker to be a top quartile employer in San Francisco, but we’re achieving that in Madison today. We have a fantastic team and are continuing to build a great employer brand. We’re excited to be part of the growing Madison tech community.”

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