I agree and I'm consistently flabbergasted at how many "entrepreneurs" see this as controversial or even wasteful. It's like the same take that "insurance is a scam". (I would not be surprised of these opinions were strongly correlated)
What kind of insurance because both health and auto insurance absolutely are. I don't think it's a coincidence that these two forms are also mandatory by law.
Insurance where there's a well defined insurable event that has a known in advance payout are great, life insurance for example. "Insurance" where the insurance company gets to decide if and how much to pay out is flat out bullshit. Everyone with auto insurance has experienced the— we decided the value of the car we declared totaled is $x where the cost of buying your exact car same year same mileage is at least $2x, usually $3x.
My favorite health insurance story is the one time I had to have an operation out of network because there were no in-network doctors that could do it. I got all the right paperwork, insurance said they would cover it, got it done and the cost was well beyond my out of pocket max. I called up insurance asking where my check was for the difference between my oopm and what I paid. Well guess what, the insurance company "decided" that the operation actually cost exactly my deductible so they owed me $0. The breakdown was hilariously bad, they claimed an anesthesiologist costs $17.
I guess my disconnect isn't that I think startups shouldn't be accustomed to working with a lawyer, but that I expected they shouldn't need one for something like this. Maybe there are enough areas where a lawyer is needed that having one on retainer already should be something startups do, so asking them to help with this wouldn't be onerous.
