The family-run Costello & Sons Insurance Brokers Inc. out of San Rafael has opened an office in Newport Beach to handle its growing list of technology clients in Southern California.
“It made more sense to have a presence down here,” said Michael Grant, who right now is the office’s sole employee, pending more hiring as revenue increases.
The 19-employee firm has a large client list of technology firms in Northern California but its Southern California presence only started cooking when the firm made a sales call to Idealabs!.
Idealabs! already had coverage through insurance giant Marsh Risk Insurance Corp, which had developed its own products specifically for technology firms and the Internet space. But Costello & Sons was able to sell policies to Idealabs! spin-offs such as GoTo.com, HeathCentral.com, FirstLook.com, CitySearch.com, Home-Page.com and a few other private companies under the umbrella of Idealabs!.
“One company referred us to another and then to another,” said Bryan Costello, chief executive of the insurance firm.
The firm decided it needed an office in Southern California and recruited Grant, who had started a technology practice at Newport Beach-based Complete Insurance Inc.
Costello & Sons has about $20 million in annual revenue and provides insurance for several publicly traded technology firms such as QuadraMed Corp., CenterBeam, CommTouch Software Ltd. and Micromuse Inc.
“It is a good start, especially for a smaller company out of the Bay Area,” Grant said.
The demand for insurance for dot-coms, software and Internet applications has been increasing with the growing number of technology companies, along with the increasing risks of cyber crime, hacking, copyright infringement in cyberspace, loss of service and other technology-related problems.
Changing With the Times
“It’s exciting to see that the insurance industry and large brokerages are acting at a fairly fast pace to address the new needs for coverage in cyberspace,” said Marc Maister, a partner who specializes in insurance in the OC office of law firm Irell & Manella.
“People think technology is invincible,” said Emily Freeman, Marsh’s national practice leader for e-business risk solutions, who developed Marsh’s technology and Internet products.
Costello & Sons will be launching a Web site in the next few months to provide online access to insurance for Internet and software firms.
“The Web site is an extension of what we already do,” Costello said. n
