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What insurance companies will I be shopped with?

Costello & Sons Insurance represents the leading personal lines insurance companies. We have included insurance coverage and financial information for each company we represent. Please feel free to explore their websites and learn more about the unique offerings of each Homeowners Insurance program.

Here at Costello & Sons Insurance we recognize the responsibility that comes with being a homeowner—furthermore we understand that it is vital to protect your home, and those who live inside, with comprehensive California home insurance.

At Costello & Sons Insurance we are proud homeowners too—exactly why we are committed to helping you navigate through this critical policy decision. You’ve worked hard to secure yourself a safe and inviting place to call your own—now the next logical step is protecting you and your property from a multitude of risk exposures.

As a well-established, full-service, insurance agency we have the ability to shop multiple carriers nationwide, comparing rates and resulting in the best possible California home insurance. No matter where you are located across the state—we’re here to help you protect what matters most!

In order to secure you the most appropriate and effective coverage, it’s important that we take the time to fully understand your individual needs—because let’s face it, every home and California homeowner is different.

Typical coverage packages for CA home insurance can include protection for the following:

  • The physical structure of your home
  • Replacement cost
  • Personal possessions
  • Additional living expense (in the event of covered loss or a natural disaster)
  • Personal Liability

Looking for specialty coverage, for those unique exposures vulnerable within your standard homeowners insurance policy? Our California home insurance can be customized with further endorsements that may be purchased to enhance your home insurance! CA clients can benefit from additional coverage options, including:

  • Valuable Articles/Floater Insurance policies (i.e. Jewelry Insurance)
  • Flood Insurance policies
  • Earthquake insurance policies
  • Umbrella Insurance policies (additional liability)
  • Animal Liability (liability issues due to household pets)

At Costello & Sons Insurance, we know what may work for one homeowner, won’t necessarily work for you. Which is exactly why we aim to create tailored insurance plans that reflect the distinct needs of you, your family and your unique home. Furthermore, we’re happy to extend our insurance expertise, all across California—so whether you’re in need of Orange County home insurance, San Francisco home insurance, or coverage anywhere across the state—we’ve got you covered with a dependable policy you can rely on!

To learn more about California home insurance policies, you can contact Mike Wardenburg at 415.257.2110 or at mwardenburg@costelloandsons.com. We would be happy to provide you with a complete coverage review as well as offer you a free quote for CA home insurance today!

Flood/Earthquake

Earthquake Coverage

As a California insurance agency, we’ve come to know quite a bit about earthquakes—making us experts at insuring the risks associated with them. Since the 1900s earthquakes have occurred on 39 states, and roughly 90% of Americans live in areas considered seismically active—yet only a very small percentage of homeowners actually purchase earthquake insurance.

We know that California homeowners have to deal with earthquake fears on a daily basis; yet only 12% of residents currently have an earthquake insurance policy. With the chance of earthquakes a regular part of California life – and the frequency of more damaging quakes rising – so why the lack of proper protection?

With so many policy options and degrees of coverage to choose from it’s not surprising that homeowners get overwhelmed. At Costello & Sons Insurance our years of extensive experience and high-quality insurance knowledge have equipped us with the ability to craft custom, top-of-the-line earthquake packages.

Whether you want to focus on protecting the structure of your home, the contents and your possessions, or want a plan that offers additional living expenses in the event of a truly ruthless quake, then rest assured because at Costello & Sons Insurance we can help tailor a plan specifically to you!

Contact us today, one of our dedicated insurance professionals would be happy to help answer your questions regarding our California Earthquake Insurance packages.

Flood Coverage

California flood insurance coverage provides protection for destruction and financial devastation caused by floods. Although it may not seem like much, even a few inches of water can cause serious damage resulting in thousands of dollars in repair and restoration costs.

Homeowner’s insurance does not typically cover flood damage—however flooding is ranked the #1 natural hazard in the U.S., occurring in and causing damages in all 50 states. Purchasing a CA flood insurance policy through Costello & Sons Insurance can protect you.

Although it may not seem as necessary as homeowners insurance, flood insurance is important if you want to keep your home safe and your possessions secure. California flood insurance offers protection against losses that result from heavy and lengthy rain falls, storm surges, blocked storm drainage systems, snow melts, etc.

Different types of California flood insurance policies are available based on your property’s location and flood history:

Standard Flood Insurance Policies

If you live in a community that participates in the National Flood Insurance Program (NFIP), your building and its contents can be covered by standard flood insurance. California residents should be aware that the NFIP was established by the Federal Government to help communities who “voluntarily participate in the NFIP by adopting and enforcing floodplain management ordinances to reduce future flood damage.” To be considered a flood, the waters must cover at least two acres or affect at least two properties. You must apply for building coverage and contents coverage separately if you choose to invest in a standard flood insurance policy.

Preferred Risk Flood Insurance Policies

If your home or business is in a low or moderate risk zone, your building may qualify for a low-cost preferred risk policy. While you aren’t required to purchase flood insurance, California residents in low-to-moderate risk areas, should consider a preferred risk policy which will protect your home and its contents if you are affected by a small flood or a larger flood that has extended into your low-risk area. In truth, many flood insurance claims occur in low-to-moderate risk areas.

Don’t wait until it’s too late. From covering overall structural losses to your personal property, we help protect the things that matter most to you with dependable California flood insurance.

There’s no reason why you should place your home and livelihood at risk.  Contact Mike Wardenburg today at 415.257.2110 or at mwardenburg@costelloandsons.com and we’ll get you on the path to superior flood protection with an affordable and comprehensive California flood insurance policy.

Auto

We all love the freedom of the open road—but that independence brings with it a particular set of responsibilities. As your leading local insurance specialists, we are dedicated to securing drivers the best auto insurance in California— without the complications of your generic insurance company.

Driving has become a necessary part of our lives; something many of us truly cannot live without. Whether it’s a quick cruise down the block or a road trip across the country—however, every time you get behind the wheel you place yourself at risk.

Here at Costello & Sons Insurance, we are proud of the superior customer support and auto insurance strategies we provide residents all across California—not to mention that we have the ability to provide you with competitive CA car insurance quotes online; allowing you to secure your policy with us from the comfort of your own home!

We love that we can go above and beyond the standard insurance offering and secure you effective vehicle coverage you can truly rely on. It’s important to remember that California State auto insurance can protect you from loss in the event of an unfortunate accident—making the policy all the more critical.

At Costello & Sons Insurance we strive to supply you with as many options as possible; thus enabling our comprehensive insurance strategies to provide you with the opportunity to custom build a policy that meets all of your auto insurance needs.

We offer the following options for your CA car insurance:

  • Bodily Injury Liability – covers injuries to others caused by the policyholder while operating an automobile.
  • Medical or Personal Injury Protection – covers treatment of the driver and passengers of the policyholder’s car in the event of an accident.
  • Property Damage Liability – covers damages caused to someone else’s property by the policyholder while operating an automobile.
  • Collision – insures the policyholder from loss during a collision with another vehicle or object.
  • Comprehensive – protection for the policyholder’s car from damage and loss resulting from incidents other than collision.
  • Uninsured Motorist Coverage – covers medical treatment of the policyholder’s injuries in the event of a collision with an uninsured driver.

We recognize that all of these varying coverage and product options can become a bit overwhelming—you want to make sure that you’re fully covered for a range of vehicle risks—yet at the same time you’re trying to keep premium expenses at the forefront of your mind. That’s why our insurance specialists are dedicated to helping you find the best auto insurance in California, as well as make you, and your unique needs, our top priority!

Is there a discount for combining my Home and Auto insurance?

Yes! Most insurance companies we represent will provide a multi-policy discount. The discount can be as high as 25% when they provide insurance for both your home and your auto.

What insurance companies will I be shopped with?

Costello & Sons Insurance represents several insurance companies. To find out more please click on the company logos below.

Contact Mike Wardenburg today at 415.257.2110 or at mwardenburg@costelloandsons.com to learn more about our various coverage options receive a complete coverage review—as well as your free CA car insurance quotes today!

Boat

Perhaps you bought a boat so you could relax and get away from it all. Or, maybe you’re a sailor at heart, drawn by the thrill of the sea and the sport. Whatever the reason, when you set sail, the last thing you want to worry about is your insurance protection.

We can help protect your boat—whether a small runabout, sailboat, yacht, or megayacht with a full-time captain and crew—with some of the most seaworthy coverage and service available on the open water.

We can design yacht coverage to provide solutions for the complex insurance issues. And we will pair you with an insurance company that provides protection you often can’t find elsewhere, providing coverage that other policies typically exclude.

To get started with the quoting process, please contact Mike Wardenburg at 415.257.2110 or at mwardenburg@costelloandsons.com.

Aircraft

Aviation insurance for a personal aircraft provides important coverage for an airplane. A well crafted Aviation policy not only covers the body of the aircraft for physical damage, but can also provide the following:

  • Liability – this is necessary protection for property damage and/or bodily injury to people other than the owner or other insured persons.
  • Medical Payments Coverage – this proves coverage for emergency expenses including co-payments and deductibles. This coverage is for anyone on the plan, including pilots.

We can help you “navigate” through all the essential coverages and provisions of an Aviation policy that will help protect you, your plane, and anyone that is lucky enough to be in-flight on your personal aircraft.

To get started with the quoting process, please contact Mike Wardenburg at 415.257.2110 or at mwardenburg@costelloandsons.com.

Collectibles

How Do I Insure My Collections?

Specific and comprehensive coverage for your collection can be underwritten as part of your Homeowners’ policy. We can secure custom policy language and specialized limits to insure your valuable collection is well protected.

As part of our Homeowners application process, we will request detailed information about your collection so your insurance program will separate the value of your collection and provide exclusive coverage limits.

Who Should I Contact to Get Coverage or Ask Questions?

To get started with the quoting process please complete the application under the Homeowners Insurance section. Or you can contact Mike Wardenburg at 415.257.2110 or at mwardenburg@costelloandsons.com.

Who should I contact for an appraisal?

To review a list of recommended appraisers, please see the toolbar to the right and click on Recommended Appraisers for contact information.

CSI represents several insurance companies that specialize in tailored insurance programs to meet the needs of your collectibles. Click the buttons below to view special considerations to be made with various types of insurable collections.

Life

What is Life Insurance?

An important part of a sound financial plan, life insurance provides a valuable death benefit to your beneficiaries upon your death. Your beneficiaries can then use this money to replace some of the income you would have earned or to help pay off debts or other expenses. Additionally, life insurance can help to cover funeral costs, which are often surprisingly high.

Aren’t there Several Types of Life Insurance?

Yes! The two common types of life insurance are term and permanent. These days, however, the life insurance marketplace is offering creative and unique approaches to life insurance structures that provide you more options than ever before.

The type that’s right for you depends on many factors, including your budget, the amount of coverage you need, and the length of time you’d like the coverage to last. To get an instant quote, please click on the button to the right to get an idea of pricing.

I like the life insurance quote I saw, how do I apply?

Sasha Specht, our Life, Disability and Long-Term Care Specialist can assist with this type of insurance. He can work with you to match you with the right product and provide the correct application to finalize the process. He can be reached at 415.257.2109 or at sspecht@costelloandsons.com.

Why Choose Life Insurance from Costello and Sons?

Costello and Sons Insurance specializes in insurance protection for individuals and families. We are here to make the process of choosing the right life insurance simple. We work closely with you to understand your unique situation so that we can provide you with the insurance portfolio that truly meets the needs of you and your family. With Costello and Sons Insurance, you’ll find the right coverage, superior service, and competitive rates. Contact us today to get the life insurance that will give you peace of mind, knowing your loved ones will be provided for.

Additional Life Insurance Information

As mentioned above, the two main types of life insurance are term and permanent. Keep reading to learn more about these different kinds of policies.

Term Life Insurance

Term life insurance is a policy that pays a benefit only if the insured person dies within the specific period of time that the policy covers. In order for this benefit to be paid, the premium payments must also be current. One of the main attractions of a term life insurance policy for many people is its affordability. The younger and healthier the insured person, the lower the premiums can be. As a result, term life insurance is often an excellent choice for young individuals who want to be certain to provide for their families should the unexpected happen.

Permanent Life Insurance

Permanent life insurance is coverage that stays in place so long as its premiums are paid and its contract obligations are kept. The clearest difference between term and permanent life insurance policies is that permanent insurance does not have the time limit that term life does. Permanent life insurance builds cash value over time, so it is an investment product. This type of coverage tends to be well suited to individuals who wish to provide benefits for their beneficiaries regardless of when they should die. Whole life, universal life, and variable life are the three most common types of permanent life insurance policies.

What Type of Life Insurance is Right for Me?

There’s no quick answer to that question. There are many different factors about your unique situation that will help to determine which type of insurance coverage best suits your needs. Contact Costello and Sons Insurance now to let us help you discover which type of life insurance is the right choice for you.

Disability and Longterm Care

What is Disability Insurance?

Disability Insurance is one of the most important types of personal insurance because it provides income replacement in the event of either accident or illness.  Many people can handle a loss of income for a few months, or in some cases, even a few years……beg, borrow, steal or spend down assets.  What would happen, however, if an illness or injury were to last longer than that?

Click Here for “Disability Insurance Basics”

What is Long Term Care Insurance?

Long Term Care Insurance provides the funds to pay for the kind of assistance needed when you lack the capacity for self care due to chronic illness, disability, or cognitive impairment.  Services can be delivered at home, at an assisted living facility, or in a nursing home.  This type of insurance can provide financial security as well as personal dignity through the retirement years.

Click Here for “Long Term Care Insurance Basics”

How do I find out more about these important coverages?

Sasha Specht, our Life, Disability and Long-Term Care Specialist can assist with this type of insurance. He can work with you to design and implement a plan that will provide peace of mind and promote financial security. He can be reached at 415.257.2109 or at sspecht@costelloandsons.com.

Excess Liability

How Do I Get Excess Liability?

Specific and comprehensive coverage can be underwritten along with your Homeowners’ policy. We can secure custom policy language and specialized limits to insure your assets are well protected.

As part of our Homeowners application process, we will request detailed information to provide appropriate coverage limits.

Who Should I Contact to Get Coverage or Ask Questions?

To get started with the quoting process please complete the application under the Homeowners Insurance section. Or you can contact Mike Wardenburg at 415.257.2110 or at mwardenburg@costelloandsons.com.

How do I know what Limit to Buy?

Obviously, determining how much coverage is right for you is a personal decision. Much depends on the value of the current assets you have to protect. However, there are also other factors to take into consideration. What will the value of your future assets be? Are you involved in activities that put you at greater risk? Do you have teenagers? Do they drive? We can work with you to provide options that meet your personal needs based upon varying risk factors we can help you identify.

Technology

Office Package

What is an Office Package Policy?

An Office package is a single insurance policy that combines several coverages previously sold separately. Office Policies can include general liability, property, auto, and a multitude of other coverages.  In addition to Technology Errors & Omissions insurance, an Office Package policy is considered a must-have insurance policy.  These policies are fairly easy to have quoted and bind coverage.  Please click on Apply Now to complete an application.

Why Do I Need It?

This policy provides both 3rd party liability for bodily injury and property damage, as well as 1st party property insurance coverage.  Your office premise lease most likely includes insurance requirements by your Landlord, and General Liability is a basic standard requirement.  The property insurance portion will cover loss to your owned property like office furniture and computer equipment as a result of fire, theft and other property perils.  Additionally, this policy can cover all of your office locations if you have more than one.

Are There Any Key Coverages a Technology Company Should Have Built Into It?

Yes! Non-Owned Auto is a key coverage that provides excess liability for your business. If an employee has an at-fault accident or a crash while operating his/her vehicle in the course of conducting business, your firm could be held liable for any liability or property damages in excess of what their personal auto policy will cover.  This policy can also provide Hired Auto coverage, which extends to your employees renting cars on company business.  This coverage only extends to cars rented in the US and Canada.

You can also include Umbrella Liability insurance under an Office Package that will allow you to purchase limits excess your General Liability, Auto Liability and Employers Liability component of Workers Compensation.  Your lease or other contracts may require limits higher than what your primary coverage policies offer.  An Umbrella insurance policy allows you to increase limits and ensure additional coverage when the primary policy limits are exhausted with one or multiple claims in a given policy period.

Does This Policy Include E&O?

No.  Technology Errors & Omissions liability insurance is obtained via a separate policy.  While the Office Package includes liability coverage, it covers physical loss a resulting in bodily injury or property damage.  An E&O policy covers financial loss in connection with rendering professional services.  Additionally, a general liability policy is written on a Per Occurrence Form, while an Errors & Omissions policy is most often written on a Claims-Made policy form.

How Much Will this Office Package Policy Cost?

An Office Package insurance policy, including both property and general liability, starts at about $1,000.  The cost of the policy will depend on the value of property your  firm owns, square footage rented, and number of employees.  We’ll work with you to ensure the best price for the most comprehensive coverage from a specialized technology insurance company.  No technology company should go without this policy.

Workers' Compensation

What is a Work Comp Policy?

Workers’ compensation provides benefits to employees and independent contractors who are injured or become ill during the course of or due to employment.

Why Do I Need It?

California requires employers to carry workers’ compensation insurance to cover the cost of occupational injuries and illnesses to employees. Tech companies should provide this coverage to all salespersons and independent contractors, as well as employees.

Are There a Classification Codes Specific to Technology Companies?

Yes!

8859 covers firms specializing in Computer Programming or Software Development AND/OR Internet or Web-Based Application Development or Operation. The code is all-inclusive, which means that if your firm qualifies all California payroll (incl. clerical and sales) will be rated with this classification.

Tech E & O / Cyber

Why Do I Need to Purchase Errors & Omissions Coverage?

Errors and omissions insurance coverage is the cornerstone of a technology company’s insurance program. In addition to coverage for professional services, this policy can cover:

  • Software E&O
  • Internet E&O
  • Network Security Liability
  • Personal Injury & Privacy Liability
  • Intellectual Property Liability
  • Copyright, including Copyright of Software Code
  • Cyber Extortion
  • Network Business Interruption

We represent all the major insurance companies offering comprehensive coverage at competitive prices. We’ll work with you to quote a policy that will include all the coverages needed by your business. Click on one of the Apply Now buttons to get started with a quick and easy insurance application.

In Addition to the Coverages Listed Above, Program Features Can Include:

Coverage

  • Defense Costs Outside the Limit of Liability
  • Business owners’ Package Coverage on One Policy Form
  • Full Prior Acts Available Even To A First Time Buyer
  • Failure to Prevent Authorized Access
  • Media & Intellectual Property Coverage

Additional Features

  • Minimum Premiums Starting at $995
  • AM Best A Rated Insurance Company
  • Deductibles Starting at $0
  • Premium Installment Plans Available

Management Liability

What is a Management Liability Insurance Policy?

Management Liability can include several lines of insurance specifically designed to protect management in their day-to-day business decisions. Coverages intended to respond to claims arising from the numerous threats to companies and their management includes: Employment Practices, Directors & Officers, Fiduciary Liability and Crime coverage.

  • Employment Practices Liability Insurance – provides coverage for a broad range of employment-related actions, including discrimination, harassment and wrongful termination.
  • Directors & Officers Liability Insurance – provides coverage for your directors & officers for defense costs, settlements and judgments related to errors and/or omissions in conducting their duties for the company.  also provides coverage for the company, if it indemnifies the directors & officers, and the company itself if it is named in a suit.
  • Fiduciary Liability Insurance – policies provide coverage for an actual or alleged breach of fiduciary duty and wrongful administration of employee benefit plans or violation of ERISA regulations.  Claims often arise from allegations breach of duty by the Plan Administrators/Trustees and include: ERISA Violations, Conflict of Interest in Investment of Plan Assets, Imprudent Investment Decisions and Mishandling of Plan Funds.
  • Crime Insurance – covers claims related to the actual destruction, disappearance, wrongful abstraction or computer theft of money and securities and other property.  This includes employee theft/forgery, employee benefit plan dishonesty, computer and funds transfer fraud and depositors’ forgery coverage.

What Insurance Limits Should my Technology Company Carry?

There is no firm answer about how much management liability insurance coverage a technology company should purchase. It is very difficult to buy enough insurance to adequately cover all possible losses. The goal is to try to purchase a reasonable amount of insurance based upon operations and perceived risks. Two major factors contribute to a company’s level of risk:

  • The general size of the organization. The bigger the technology company the bigger the target.
  • The number of employees and the potential for employment liability claims.

Why Should My Technology Company Consider Buying This Insurance?

There is often a misconception among directors and officers of privately held technology companies that they are somewhat insulated from management-related litigation because they are not as visible as their counterparts in publicly-owned technology companies are. But based on recent surveys and court decisions, the likelihood of a director or officer of a privately held corporation being sued has increased substantially. Additionally, widespread media coverage of employment-related litigation, increased merger and acquisition activity, a still uncertain economy and regulators’ enhanced scrutiny are among the reasons for the heightened exposures directors and officers face.
Here are a few important reasons to consider each insurance coverage part:

  • Directors & Officers insurance coverage will protect the assets of Directors and Officers, since they can be held personally liable for their wrongful acts committed on behalf of the corporation.  And Management must spend a great deal of time in depositions and other court hearings, and not focused on the needs of the organization.
  • Companies have Employment Practices exposure at all times including when you interview, hire, employ, promote, discipline, pay and terminate prospective, current and past employees.  Start-ups are especially vulnerable because they can’t afford a person dedicated to human resources until they reach a certain size level.
  • With respect to Fiduciary insurance coverage, Plan fiduciaries cannot protect themselves completely from personal liability under ERISA. Even with a participant directed 401(k), plan fiduciaries can be held liable for a variety of reasons including the selection of plan investment options, monitoring those investments, and educating employees on those options.
  • Most Businesses, particularly those with employees, should have some form of Commercial Crime insurance coverage. Statistics have shown that Crime claims occur frequently – not quite as high as workers compensation insurance issues but on par with employment practices claims. While claim amounts are not typically catastrophic in size, the frequency of these claims is a significant problem most employers face.

401K

What is a 401(k)?

A 401(k) is company-sponsored retirement plan that allows employees to save for retirement by taking a portion of their wages and investing them in a tax advantaged account containing various investment vehicles like stocks, bonds, mutual and index funds. The employee can typically choose to either 1) defer income taxes on the contributions and growth until withdrawn at 59 1/2 (Traditional), or 2) pay taxes and contribute the net amount which grows tax free and is withdrawn tax free at age 59 1/2 (Roth).  Employees who participate in a 401(k) choose the amount they wish to contribute and a portion is withheld from their paycheck until the total desired annual contribution is attained.

Why do I need it?

According to the Retirement Benefit Research Institute, 43% of American workers indicated they have less than $10K in retirement savings, 27% said they had less than $1,000, and only 16% said they have confidence in their ability to save enough for a comfortable retirement.  Your financial future and retirement security depends on what you save for yourself today.  This is more challenging than ever in an environment where the Social Security system is cash flow negative, federal monetary and fiscal policy is creating the potential for hyper-inflation, and entitlement programs such as Medicare and Medicaid are becoming increasingly expensive and may not be available when you need them.  A 401(K) plan allows workers to systematically save for retirement and take advantage of tax deferred or tax free compound growth over a significant period of time.

How does it work?

Your employer works with CSI to establish a 401(k) plan and then enlists the aid of retirement plan specialists and investment professionals to help guide you through the process of setting up your individual account and choosing investment vehicles that map to your personal retirement goals and objectives.  Ultimately, 401(k0) plans are self-directed, which means you have control over how you invest your contributions pursuant to the investment options available to you in your particular plan.  You will have ongoing access to these investment professionals throughout the year.

Why CSI?

CSI has partnered with premier boutique investment advisory firm Three Bell Capital LLC to provide ongoing support and investment advice to CSI 401(k) plan sponsors and participants.  The Three Bell team has extensive experience working with companies to establish a retirement plan that reflects the goals and objectives of each individual organization.  Three Bell structures and administers 401(k) plans at the corporate level, and then provides ongoing personalized individual retirement counseling, investment advice, enrollment support, and educational workshops to ensure plan participants are maximizing their 401(k) benefits.

For more information about our 401(k) plans, please visit our website and contact Jon Porter at 650-485-2338, or jon@three-bell.com.

Health Benefits

What Benefit Products Do You Offer?

We offer Medical (Domestic & International), Dental, Optical, Employee Assistance Plans (EAP), and Voluntary Benefits

Do You Offer Any Supplemental Services?

Yes! We offer benefit consulting, cafeteria plan administration, COBRA administration, benefits administration outsourcing, and the ability to go PAPERLESS! Please click on Benefit Services in the panel to the right for more information.

Who are your primary carriers?

Medical

Aetna
Blue Cross of California
Blue Shield
Guardian
Health Net
United Healthcare

Dental

Aetna
Blue Cross
Delta Dental
Guardian
Met Life
Reliance Standard

Vision

VSP
CoPower
Guardian
MES

To request Plan information for Group Health Plans please contact
Jeff High at 415.257.2127 or at jhigh@costelloandsons.com

Key Man

What is Key Man Life Insurance?

Key Person Insurance is a type of business insurance taken out to indemnify either an employer or a lender against the financial loss that could result from the premature death or extended incapacity of a company’s most essential employees. Depending on the type of business, this might be a company founder, a top salesperson, a lead researcher, or a project manager. These individuals are considered key employees because they either have valuable expertise specific to the business or are, in one way or another, responsible for the bulk of the company’s revenue. Their loss could significantly impact the profitability and stability of the business. Start-up companies are especially vulnerable in this area and, as such, it is not uncommon for banks, venture capitalists, and other lenders to require this type of coverage be implemented as a condition of providing funding.

Insurance Solutions

Individual life insurance policies and disability insurance policies are the products of choice to address this type of need. They are owned by the company with the company typically being named the beneficiary as well. The life insurance policy would provide the funds to guarantee business loans, offset lost income resulting from project cancellations or lost sales based on customer’s lack of faith in the ongoing viability of the company. The Key Person disability policy is a specialty product designed to provide the funds to enable a company to recruit, hire, and train a replacement for the incapacitated employee.

Want More Information?

Sasha specht, our Life, Disability and Long-Term Care Specialist can assist with this type of insurance. He can work with you to match you with the right product and ensure compliance with IRS code Section 101(j). He can be reached at 415.257.2109 or at sspecht@costelloandsons.com.

Buy Sell Insurance

Why Do I Need Buy Sell Insurance?

When you executed your articles of incorporation, LLC documents, or your partnership agreement, you started your company on the road to success. The business has done well and you have many front- burner activities vying for your time and attention. Most likely, you’ve not given much attention to what your documents say since the day they were executed. So, when the unthinkable happens and your business partner meets an untimely death, aside from the staggering realization that your business life has changed substantially, you will now be forced into becoming intimately familiar with what those documents require in order to ensure the future financial viability of the business.

Assuming the attorney that originally drafted the documents did a thorough job, there will be a section that will lay out the required actions and financial responsibilities of the remaining principals. This is commonly referred to as a buy-sell arrangement or a corporate stock redemption plan and will stipulate what happens in the event of the death or disability of a principal of a firm. Under the terms of the agreement, the remaining partners or shareholders will typically have agreed to purchase the business interest from the decedent’s heirs for a stipulated price or a price derived from a previously agreed upon valuation formula.

After reviewing the documents, the next task is to write a check to the heirs. Where is the money going to come from? Will it come from retained earnings paid out over time on an installment basis? Will the company have to borrow the funds or mortgage assets to come up with the money? Will these methods have an adverse effect on the economic viability of the business? In order to cause the least drain on the business, the majority of buy-sell or stock redemption plans are funded with life insurance. Life insurance is considered the method of choice because implementation is straight forward, cost effective, and will deliver the appropriate amount of capital at the exact time it is required. It is, of course, important to make certain that the policy death benefits are kept consistent with the current valuation of the business so that the liability is not underfunded.

The incapacity of a principal is also addressed in a comprehensive buy-sell and disability buy-sell policies are available specifically designed to address this need. Because it takes three years of an entity’s earnings history be available before an insurance carrier will issue disability buy out policies, many times this coverage simply never gets implemented even though the life policies have been put in place.

Questions for Thought

  1. Is there a written buy-sell or corporate stock redemption plan in place?
  2. What events trigger offers or sales?
  3. What is the business valuation or formula?
  4. When was the last time the business was valued?
  5. Is the agreement funded? Life? Disability?
  6. Is the funding level sufficient?

Want More Information?

Sasha Specht, our Life, Disability and Long-Term Care Specialist can assist with this type of insurance. He can work with you to match you with the right product and ensure your business is protected. He can be reached at 415.257.2109 or at sspecht@costelloandsons.com.

Venture Capital / Private Equity

Office Package

What is an Office Policy?

An Office policy is a single insurance policy that combines several coverages previously sold separately. Office Policies can include general liability, property, auto, and a multitude of other coverages.

Why Do I Need It?

From a Liability standpoint, your Landlord will require it. From a property standpoint, this will protect your office contents from fire, theft and other property perils.

Are There Any Key Coverages a Venture Capitol or Private Equity Company Should Have Built Into It?

Yes! Non-Owned Auto is a key coverage that provides excess liability for your Venture Capitol or Private Equity company. If an employee has an at-fault accident or a crash while operating his/her vehicle in the course of conducting business, you could be held liable for any liability or property damages.

Workers' Compensation

What is a Work Comp Policy?

Workers’ compensation provides benefits to employees and independent contractors who are injured or become ill during the course of or due to employment.

Why Do I Need It?

California requires employers to carry workers’ compensation insurance to cover the cost of occupational injuries and illnesses to employees. Tech companies should provide this coverage to all salespersons and independent contractors, as well as employees.

Are There a Classification Codes Specific to Venture Capital Firms?

Generally the payroll of Venture Capital Firms will call into one of two classifications:

8810 – Clerical/Administrative – For employees office-based
8742 – Outside Salesperson – For salespersons out of the office a significant portion of the work week.

Venture Capital & Asset Management

What is a Venture Capital Liability Policy?

This type of policy offers venture capital and private equity firms an effective, comprehensive way to transfer and mitigate many of
their most significant liabilities by combining four coverages into one policy:

  • Management Liability Insurance
  • Management Indemnification Insurance
  • Outside Directorship Liability Insurance
  • Professional Services Liability (Errors and Omissions)   Insurance

What Limits should I buy?

There is no firm answer about how much venture capital liability coverage a company should purchase. It is very difficult to buy enough insurance to adequately cover all possible losses. The goal is to try to purchase a reasonable amount of coverage based upon operations and perceived risks. Two major factors contribute to a company’s level of risk:

  • The general size of the organization. The bigger the
    company the bigger the target.
  • The number of employees and the potential for
    employment liability claims.

Why should I buy it?

The Venture Capital Liability policy effectively addresses the needs of many types of private investment firms that manage other types of funds, including:

  • Small business investment company funds
  • Corporate-sponsored funds
  • Fund of private equity/venture capital funds
  • Distressed debt funds
  • Mezzanine debt funds
  • Government-sponsored funds

Cyber

Why is Cyber Liability Insurance important today?

The number of Data Breaches and Hacking Attacks have skyrocketed in the last five years. This is no longer an “optional” coverage that applies to specific industries – Cyber Liability Coverage is now a crucial element to ALL business’s risk management strategies.

  • Amount of Losses Businesses report in 2015: $40B
  • Average Cost per record Lost: $201
  • Percentage of Phishing Links Clicked within the first Hour: 50%
  • Number of Malware Events That Occure Every Second: 5

These numbers are staggering which is why at Costello & Sons, we have access to one of the leading cyber carriers in the United States, Evolve MGA. This access allows us to bring you one of the broadest cyber forms available while also administering one of the simplest application processes in the market which can be found on our VC/PE page.

What are some of the coverage’s included?

  • Social Engineering – Unauthorized Funds Transfer
  • Cyber Extortion
  • Forensics
  • PCI Fines, Penalties, & Assessment Costs
  • Notification Costs
  • Business Interruption
  • System Damage
  • Reputational Harm
  • Regulatory Fines & Penalties
  • Cloud Coverage
  • 24/7 Data Breach Hotline
  • and More

Crime

What is Crime Insurance?

Crime Insurance covers claims related to the actual destruction, disappearance, wrongful abstraction or computer theft of money and securities and other property.  This includes employee theft/forgery, employee benefit plan dishonesty, computer and funds transfer fraud and depositors’ forgery coverage.

Why should you have Crime Coverage?

Statistics have shown that Crime claims occur frequently – not quite as high as workers compensation insurance issues but on par with employment practices claims. While claim amounts are not typically catastrophic in size, the frequency of these claims is a significant problem most employers face.

Key Person Life

What is Key Man Life Insurance?

Key Person Insurance is a type of business insurance taken out to indemnify either an employer or a lender against the financial loss that could result from the premature death or extended incapacity of a company’s most essential employees. Depending on the type of business, this might be a company founder, a top salesperson, a lead researcher, or a project manager. These individuals are considered key employees because they either have valuable expertise specific to the business or are, in one way or another, responsible for the bulk of the company’s revenue. Their loss could significantly impact the profitability and stability of the business. Start-up companies are especially vulnerable in this area and, as such, it is not uncommon for banks, venture capitalists, and other lenders to require this type of coverage be implemented as a condition of providing funding.

Insurance Solutions

Individual life insurance policies and disability insurance policies are the products of choice to address this type of need. They are owned by the company with the company typically being named the beneficiary as well. The life insurance policy would provide the funds to guarantee business loans, offset lost income resulting from project cancellations or lost sales based on customer’s lack of faith in the ongoing viability of the company. The Key Person disability policy is a specialty product designed to provide the funds to enable a company to recruit, hire, and train a replacement for the incapacitated employee.

Want More Information?

Sasha Specht, our Life, Disability and Long-Term Care Specialist can assist with this type of insurance. He can work with you to match you with the right product and ensure compliance with IRS code Section 101(j). He can be reached at 415.257.2109 or at sspecht@costelloandsons.com.

Still Need Help?

Our team is always here to guide you through the process and answer additional questions.